| dc.description | COMMISSIONER GENERAL (TRA) VS. CRJE ESTATE LIMITED COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (Kwariko, Kerefu and Maige, JJ. A)
CIVIL APPEAL NO. 370 OF 2021.
(From the decision of the Tax Revenue Appeals Tribunal at Dar es salaam, by Mjemmas, Chairperson, dated 7th September,2021 in Tax Appeal No. 67 of 2019)
Law of Taxation-exemption of import duty- certificate of incentive issued by TIC-Whether is an agreement between the government and the investor.
Law of Taxation- certificate of incentive being an agreement- whether Attorney General need to be involved in making of the certificate in question.
Law of Taxation- exemption of import duty- applicability of the amendment brought by Financial Act, 2013, whether the amendment affect the holder of the certificate of incentive issued by the TIC in 2009.
Civil practice and procedure- interpretation of laws – whether amendment of law on substantive right apply retrospectively.
The respondent, CRJE Estate Limited, a construction company duly incorporated under the laws of Tanzania, entered into an agreement, in 2008 with Mwalimu Nyerere Foundation for construction of a commercial building in Dar es Salaam. It is common ground that, the project, the subject of the dispute, was registered with the Tanzania Investment Centre (TIC) in December, 2008 and a certificate of incentive under section 17 of the Tanzania Investment Act [Cap. 38 R.E. 2019], (the TIA) was granted to the respondent in January 2009 and which was subsequently, extended as per exhibits A4 and A7, to November, 2018. In carrying out the project, the respondent imported various deemed capital goods unto which the appellant approved 100% import duty exemption pursuant to the respective certificate. Of significance to note is the fact that; until 2009 when the certificate of incentive in exhibit A3 was being issued, the law in terms of section 19 (1) of the TIA read together with section 4(4) (a) of Customs Tariff Act, 1976 (CTA) provided for zero import duty for deemed capital goods in respect of an investor with a certificate of incentive. Besides, under section 19(2) of the TIA, the benefits attached with the certificate could neither be amended nor modified during the five years period of the certificate. In 2012, section 19 of the TEA was amended by the Finance Act No. 8 of 2012 to the effect of introducing the provision of subsection (4) which restricted the import duty exemption granted to deemed capital goods to 90%. Again, the same provision was further amended by Finance Act No. 4 of 2013, so that the exemption granted to an investor holding a certificate of incentive in respect of deemed capital goods was restricted to 75%. In 2017, having procured the extension of the certificate as per exhibit A7, the respondent wrote to the TIC on the status of the exemption after the amendment. The latter officially informed the former as per exhibit A8 that, the amendment did not affect the investors who were already implementing their projects. On further inquiry to the appellant, the respondent was informed that under the amendment brought by Finance Act of 2013, the respondent was obliged to pay 25% import duty. As a result, the appellant served the respondent a demand notice in exhibit A10 for payment of TZS 2,268,636,778.63. The appellant maintained the same position notwithstanding the respondent's application for review. Being aggrieved, the respondent appealed to the Tax Revenue Appeals Board (the Board). The Board having heard the appeal and considered the provision of section 19(2) of the TIA in line with the amendment, was of the opinion that, the amendment in question did not affect the benefits created before its coming into forth. The appellant herein being aggrieved with such finding he appealed to the Tax Revenue Appeals Tribunal, after the hearing of such appeal the tribunal dismissed the appeal, hence the appellant filed the present appeal at the court of appeal.
Held:
(i) we are of the view that, in as long as it deals with a certificate of incentive under section 17 of the TIA, the authority is relevant in the instant case. Therefore, just like the Tribunal, we hold that, the certificate of incentive in dispute constituted an agreement between the Government and the respondent as an investor.
(ii) In any event, the TIC being a statutory institution owned by the Government, whether the requirement under the Public Service Standing Orders was complied with or not, is an administrative and management affair within the Government which would perhaps fall under the domain of administrative law. It cannot, as rightly contended for the respondent, be resolved by having a look at the certificate itself in isolation of other relevant information within the knowledge of the appellant and the TIC itself. We shall therefore, not take the said complaint into our account.
(iii) Under section 19 (2) of the TIA, the benefits granted in a certificate of incentive to an investor can neither be amended nor modified during five years of the certificate at the detriment of the investor. The rationale behind is express in the provision. It is "to create predictable investment climate" which is necessary in promoting capital investment.
(iv) The benefits introduced under section 20 of the TIA for strategic and major investors were, until 2013, merely additional and not derogatory to those created under section 19(1) and (2) of the TIA.
(v) Equally so, they are not, at least, at this particular juncture, in dispute that, a law affecting substantive rights like this, does not operate retrospectively unless it is express in the amendment law, which is not.
Appeal dismissed.
Mr. Moses Kinabo, Principal State Attorney, for Aplicant
Dr. Erasmo Nyika and Ms. Hadija Kinyaka, both learned advocates, for Respondent.
Cases referred:
1. Vodacom Tanzania Public Limited Company vs. Commissioner General, TRA, Civil Appeal No. 107 of 2020 (unreported).
2. Pan African Energy Tanzania Limited vs. Commissioner General TRA, Civil Appeal No. 426 of 2020 (unreported).
3. Municipality of Mombasa vs. Nyali Ltd (1963) E.A. 371.
4. Bidco Oil and Soap Ltd vs. Commissioner General, Tanzania Revenue Authority, Civil Appeal No. 89 of 2009 (unreported).
JUDGMENT OF THE COURT
(Delivered 7 October,2022) | en_US |
| dc.description.abstract | (i) we are of the view that, in as long as it deals with a certificate of incentive under section 17 of the TIA, the authority is relevant in the instant case. Therefore, just like the Tribunal, we hold that, the certificate of incentive in dispute constituted an agreement between the Government and the respondent as an investor.
(ii) In any event, the TIC being a statutory institution owned by the Government, whether the requirement under the Public Service Standing Orders was complied with or not, is an administrative and management affair within the Government which would perhaps fall under the domain of administrative law. It cannot, as rightly contended for the respondent, be resolved by having a look at the certificate itself in isolation of other relevant information within the knowledge of the appellant and the TIC itself. We shall therefore, not take the said complaint into our account.
(iii) Under section 19 (2) of the TIA, the benefits granted in a certificate of incentive to an investor can neither be amended nor modified during five years of the certificate at the detriment of the investor. The rationale behind is express in the provision. It is "to create predictable investment climate" which is necessary in promoting capital investment.
(iv) The benefits introduced under section 20 of the TIA for strategic and major investors were, until 2013, merely additional and not derogatory to those created under section 19(1) and (2) of the TIA.
(v) Equally so, they are not, at least, at this particular juncture, in dispute that, a law affecting substantive rights like this, does not operate retrospectively unless it is express in the amendment law, which is not. | en_US |
