| dc.description | STATEOIL TANZANIA AS (CURRENTLY KNOWN AS EQUINOR TANZANIA AS) V. COMMISSIONER GENERAL TANZANIA REVENUE AUTHORITY (TRA) COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM(MKUYE, KENTE, KIHWELO, JJ.A.)
CIVIL APPEAL NO. 372 OF 2020
(From the Decision of the Tax Revenue Appeals Tribunal at
Dar es Salaam (Kamuzora, Vice Chairperson) dated the 21st day of April, 2021
in Tax Appeal No. 20 of 2020)
Tax Law- Stamp duty- instrument executed outside Mainland Tanzania in relation to any property in Tanzania-whether is chargeable with stamp
Tax Law- stamp duty- chargeable instrument executed outside Mainland Tanzania- time within which stamp duty is to be paid.
Tax Law-stamp duty- exemption by the Minister to pay stamp duty- How to effect exemption.
Tax Law-dispute on assessment of Tax before the Board and the Tribunal- proof that the assessment is excessive- who has the onus of proof.
This is an appeal by Statoil Tanzania AS (currently known as Equinor Tanzania AS), the appellant, against the judgment and decree of the Tax Revenue Appeals Tribunal (the Tribunal) dated the 21st April, 2021 in Tax Appeal No. 27 of 2020. The facts giving rise to this appeal may be summarized as herein. The appellant is a limited liability company incorporated under the laws of Tanzania and its principal business is exploration of oil and gas in Tanzania since 2007. One of the areas where the appellant was operating was Block 2, situated within Tanzania's Exclusive Economic Zone. Meanwhile, the Appellant executed the Farm-Out Agreement with ExxonMobil Exploration and Production Tanzania Limited in which the appellant assigned its petroleum rights under the Production Sharing Agreement (PSA) to ExxonMobil Exploration and Production Tanzania Limited. The said Farm-Out Agreement was executed outside Tanzania. On 19th August, 2013 the Respondent conducted a comprehensive tax audit exercise into the tax affairs of the appellant, covering stamp duty, withholding tax, Value Added Tax (VAT) and Pay as You Earn for the year of income 2011 and came to the conclusions that, there was a tax liability to the tune of TZS. 170, 414, 448.00 arising from the Farm-Out transaction on Block 2 between the appellant and ExxonMobil. As a result of such audit, a demand notice for payment of stamp duty to the tune TZS. 170, 414, 448.00 was issued by the respondent to the appellant.
The appellant, unamused with the demand notice, lodged an objection before the respondent contesting it. However, the objection was not successful. Meanwhile, during the objection process, the respondent, orally informed the appellant that, the disputed amount had already been deducted from the appellant's VAT refunds which were due. Aggrieved by the respondent's decision, the appellant knocked the door of the Board challenging it. Upon full determination, the Board in its decision found in favour of the appellant, something which triggered the respondent to lodge the appeal before the Tribunal seeking to reverse the decision of the Board. On 21st April, 2021 in Tax Revenue Appeals Tribunal quashed and reversed the decision of the Tax Revenue Appeals Board that found the respondent was not justified in imposing stamp duty on the Farm-Out Agreement between the appellant and ExxonMobil which was executed outside Mainland Tanzania. Aggrieved by the impugned decision the appellant lodged this appeal to challenge that decision.
Held
Held
(i). Any instrument executed outside Mainland Tanzania in relation to any property in Tanzania is chargeable with stamp.
(ii) Every chargeable instrument executed outside Mainland Tanzania shall be stamped within thirty days of its first arrival in Mainland Tanzania.
(iii). The Minister has discretion to exempt any chargeable instrument from stamp duty and the Minister has to do so by a notice published in the Government Gazette.
(iv). The onus of proving that the assessment or decision in respect of which an appeal is preferred is excessive or erroneous shall be on the appellant.
Appeal dismissed
Statutory Provisions referred to:
1. Tax Revenue Appeals Act, [Cap. 408 R.E 2019], section 18(2)(b)
2. Stamp duty Act, Cap 189 R.E 2019 Sections 5 (1) (b), 16 (1), 18 and 26
No Cases referred to:
Dr. Fayaz Bhojan, Dr. Abel Mwiburi and Anitha Kimario Learned Advocates for the appellant
Mr. Amandus Ndayeza, Yohana Ndile and Nyamtungila Mgune Learned State Attorneys for the Respondent | en_US |
