Tanzania: Court rejects school’s appeal to evade TRA tax



LA Hellenic Foundation of Tanzania Limited, which operates as ST. The Constantine International School has to pay a substantial Skills and Development Tax (SDL) to the Tanzania Revenue Authority (TRA) which it defaults for the 2013 to 2017 revenue years.

This follows the Court of Appeal’s decision to dismiss the appeal whereby the appellant company, a legal person engaged in public education, filed to challenge the findings of the Tax Revenue Appeal Tribunal ( Court).

“We find nothing to fault with the Tribunal’s decision. Therefore, we dismiss the appeal in its entirety with costs, ”said a panel composed of Judges Gerald Ndika, Lugano Mwandambo and Lucia Kairo in favor of the TRA, the respondent in the appeal.

At the hearing of the appeal, counsel for the appellant argued that the Tribunal erred in law and in fact in ruling that his client was not a charity within the meaning of section 19 (2) of the Law on Vocational Education and Training, regardless of admission by TRA in the contrary writings.

He stated that the Tribunal erred in law in concluding that the appellant is responsible for paying the skills and development tax on the assumption that the respondent exercised due diligence without any evidence and without any plea. in this regard.

The appellant added that having concluded that there had been no due diligence on his status with respect to SDL’s enforceability and that there was no evidence that due diligence had been conducted, the Tribunal erred in finding that it is required to pay such levy.

In the recent judgment, the judges of the Court of Appeal however took into account the principle according to which the parties are bound by their own pleadings, as has been reiterated in many cases, including that of Pauline Samson Ndawavya.

However, the judges could not agree that by noting the appellant’s assertions in the notices of appeal, the respondent admitted that he was exempt from paying SDL. “We believe that in noting (such) content the Respondent did not dispute the Appellant’s assertions that this was a registered international school providing nursery, primary and secondary education; that the appellant was a registered charity and its activity was for the public good, “they said.

The judges also noted that in the responses to the notices of appeal, the respondent argued that the appellant was required to pay SDL, a claim which crucially denied any impression that the TRA admitted the claimed exemption from SDL.

As to whether the appellant was required to pay SDL as assessed by the respondent, they examined certain provisions of the VETAAct and noted that in order for a charity to be so treated for the purposes of the exemption from SDL, the condition set out in Section 19 (2) of the VETA Act must be satisfied.

“We found no evidence in the appeal record to prove that the appellant met the condition. Thus, the argument (of counsel for the appellant) that the appellant was subject to the payment of SDL on the basis of the uncertain or ambiguous provision of the law, does not hold water, “said the judges.



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