COURT of Appeal has dismissed with costs an application by UK-based oil and gas conglomerate, BG International Limited, against payment of 4.2bn/- tax to Tanzania Revenue Authority (TRA).
Justice Sivangilwa Mwangesi agreed with submission by TRA Commissioner General that there was no merit in the application under which the foreign company had sought extension of time to file supplement records of appeal from the judgment and decree of the Tax Revenue Appeals Tribunal.
In its judgment, the Tribunal upheld the findings of the Tax Revenue Appeals Board in consolidated Tax Appeals No. 28 and 29 of 2014, dismissing the BG International appeal to oppose payment of 4,282,732,302/- to TRA.
The board had established that the Pay as You Earn (PAYE) and Skills and Development Levy were to be paid in 2010 and 2011, but were not.
It found further that the company had no legal justification to do so and, as a result, the board dismissed the company’s appeal, ordering it to pay the amount with interest.
In its application that has been dismissed, BG was moving the appeal court to issue an order of leave for extension of time within which to file supplementary record of appeal that would include, among others, exhibits that were tendered and admitted in evidence at the Appeals Board.
During the hearing of the application, the applicant had shifted blame to the management of the Appeals Board for his failure to append the exhibits to the record of appeal.
Justice Mwangesi pointed out that it was correct as argued by the counsel for the applicant that it has been established his client had requested for the necessary documents to append to the appeal within the prescribed time there was nothing else which he could have been expected to do so.
Referring to Rule 90 (1) of the Court of Appeal Rules, the Justice said that application for certified documents to be included in the record of appeal has to be made within 30 days of the date of the decision against which it’s desired to appeal.
He noted that the decision intended to be challenged by the applicant in the application was delivered on May 2, 2017. Under such circumstances, the request for the exhibits to be included in the record of appeal ought to have been made not later than 30 days from that date.
“Nonetheless, the letter to the Secretary of the Tax Revenue Appeals Board requesting for the exhibits which had been tendered and admitted in evidence during the trial was written on July 5, 2017, that is after elapse of about 64 days,” the justice observed.
The period, he said, was by far beyond the 30 days stipulated in the rules.
The justice found, therefore, that the letter requesting for the exhibits which was written after the expiry of the time prescribed by the law without leave being granted was ineffectual.
“The applicant was obliged to apply to the Tribunal for extension of time to request for the exhibits first, before coming to this court. In that regard, I am constrained to join hands with the respondent (TRA) and hold that there is no merit in this application. It is accordingly dimissed with costs,” he declared.
The applicant is the foreign company based in United Kingdom but has a branch in Tanzania. It has since 2010 been engaged in oil and gas explorations.
Sometimes in August 2012, TRA conducted tax investigations in the company’s affairs in Tanzania, covering several taxes, including corporate, withholding and employment taxes. An issue arose regarding the company’s employees based in the UK over nonpayment of PAYE and SDL.
It was discovered that BG International had underpaid PAYE and SDL for 2010 and 2011 for its employees based in the UK. According to the findings, 405,830,000/- and 64,147,524/- were not paid as PAYE and SDL, respectively in 2010, making a total of 469,977,524/-.
The preliminary audit findings by TRA further uncovered that 3,284,431,198/- and 528,323,580/- were not paid as PAYE and SDL, respectively, making the total unpaid taxes for 2011 to be 3,812,754,778/-.
Several communications were made between the parties without any agreement.