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Tanzania Budget 2024

Revolutionizing Tax Disputes Resolution: A call for overhauling our framework

by Waziri Jumanne

In the Controller and Auditor General's Report for the year 2022/2023, it was highlighted that there were 141 tax appeal cases worth about TZS 284.16 billion pending at the Tax Revenue Appeals Tribunal (TRAT) and as of October 2023, there were 643 tax appeal cases worth about TZS 3.40 trillion and USD 4.66 million in undecided cases at the Tax Revenue Appeals Board (TRAB). The pace of hearing and resolving the cases has been a long-standing topic of discussion with tangible efforts to address and resolve these issues apparently lacking.

Tax disputes often arise from audits conducted by the Tanzania Revenue Authority (TRA). When a taxpayer disagrees with the assessments made after the audit, they can go through a series of stages to address their concerns. First, they can raise objections, followed by the determination stage of the objections. If the matter remains unresolved at the TRA level, the taxpayer has the right to appeal to the TRAB, and subsequently to the TRAT. Ultimately, if still aggrieved by the decisions from the quasi-judicial bodies, the taxpayer can take their case to the Court of Appeal (CAT). 

Taxpayers consistently engage in the appeal process due to the lack of an alternative efficient mechanism for resolving their cases. In 2021, an initial effort was made to address this issue by amending the Tax Revenue Appeals Act. The amendment introduced the possibility for any party involved in an appeal before the TRAB or the TRAT to apply for an amicable settlement of the appeal through the mediation process, at any stage of the proceedings, prior to the issuance of a judgment. In 2022, this provision was further refined, aiming to streamline the process by transitioning from a mediation process that has specific legal requirements such as having a mediator to a simpler approach— just “an amicable settlement” reached outside the TRAB or TRAT.

While the introduction of the amicable settlement process was very welcomed, its implementation and procedures have proven to be quite challenging, leading to the slow resolution of cases. To initiate the amicable settlement process, a party to the appeal must first send a letter to the other party, indicating their intention to resolve the matter outside the purview of the TRAB or the TRAT. 

Subsequently, a formal proposal to settle the case amicably needs to be submitted to the Commissioner General through the Directorate of Legal Affairs. In this proposal, there must be grounds for the application. Our understanding is that the case is then assigned teams within TRA to resolve it, sometimes including teams involved during the objection stage. 

There is a risk that this approach may leave limited room for meaningful discussion. The TRA often delves into technical aspects and frequently demands complete supporting information if there was missing information during the objection stage. As a result, many proposals are rejected, and the cases are returned to the appeal process, undermining the original purpose of seeking an amicable resolution. The intention behind amicable settlement was to foster a spirit of compromise and cooperation, but the current approach seems to lack that dynamic.

In addition to the introduction of amicable settlements outside of TRAB or TRAT, the establishment of the Tax Ombudsman office was seen as a potential avenue for handling disputes. However, the role of the Tax Ombudsman office primarily revolves around reviewing and addressing complaints related to the quality of services provided by the TRA, as well as procedural and administrative issues stemming from the enforcement of tax laws. As a result, its focus seems to be primarily on addressing broader concerns about the TRA's operations, rather than specifically resolving tax-related disputes through alternative means.

I have considered three potential solutions to address the challenges mentioned earlier. The primary solution entails establishing an independent department or directorate dedicated to Alternative Tax Dispute Resolution (ADR) within the TRA. This independent ADR department would operate autonomously, having its own Commissioner or director who reports directly to the Commissioner General, similar to how the Commissioners for the Large Taxpayers Department, Domestic Revenue, and Customs & Excise function. We can draw inspiration from our neighbor, Kenya, who has successfully implemented a fully independent and functional ADR department since 2015. For example, in financial year 2023 alone, the Kenyan ADR process facilitated the resolution of 1,038 cases involving a total tax amount of KES 15.2 billion, demonstrating its effectiveness.

An alternative approach could involve enhancing the scope of the Tax Ombudsman office by introducing an amicable settlement function, complementing its existing limited activities that currently fail to effectively address the growing number of tax cases. This would require a reevaluation of the tax ombudsman regulations and the establishment of a greater sense of independence, thereby instilling taxpayers with confidence in the office's ability to resolve disputes.

Finally, if neither of the aforementioned approaches is adopted, perhaps the Ministry of Finance can consider issuing dedicated regulations specifically addressing the amicable settlement of tax cases outside the existing appeal mechanisms. This would provide clear guidelines on how such settlements should be conducted in an independent and efficient manner.

From my perspective, the establishment of an independent ADR department holds great promise as the most effective solution to tackle the growing number of appeals at the TRAB, the TRAT, and the CAT. Such a dedicated department would provide a specialized framework for resolving tax-related disputes, offering an effective and efficient alternative to the current system.

Waziri Jumanne is a Senior Manager with Deloitte Tanzania. The views presented are his own and not necessarily those of Deloitte. He can be reached at


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