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TICTS' bid for return of Sh6.5bn flops

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by BAK, Jan 10, 2009.

  1. BAK

    BAK JF-Expert Member

    Jan 10, 2009
    Joined: Feb 11, 2007
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    2009-01-10 08:43:00

    Firm's bid for return of Sh6.5bn flops
    By Bernard James

    The Tanzania International Container Terminal Services (TICTS) has failed in its attempt to have Sh6.5 billion seized by TRA at Citibank returned.

    The Tax Revenue Appeals Board heard the VAT tax application lodged by TICTS and ruled that the disputed tax must be collected as the firm did not file an appeal against the seizure to support its application.

    "It is not proper for the applicant to file an application seeking temporary measures instead of lodging a formal appeal against the decision of TRA commissioner general," the board observed in a ruling last week.

    The firm had filed an application to the board, seeking temporary orders for TRA to uplift an urgency notice it served against TICTS' banker, Citibank.

    The notice was issued to execute TRA�s decision in August last year to collect the amount in unpaid taxes amounting to Sh6.5 billion.

    The firm's proposal to raise fees of of container handling services at the Dar es Salaam port by between 150 and 300 per cent, was recently rejected by the Fair Competition Tribunal.

    The firm will, however, charge new fees that do not exceed 100 per cent of its current container handling charges.

    The dismissal of the application comes after the board upheld preliminary objection to the application on three grounds including the one that the board lacked jurisdiction to entertain the application because there was no appeal pending before it as required by the provisions of Tax Revenue Appeals Board Act.

    TRA also wanted the application stuck out on ground that the application was bad in law for lack of proper legal citation.

    TRA lawyer Primi Telesphori argued that the application was brought under Section 5 of TRA Act which did not require the applicant ( TICTS) to apply or lodge an application against the aggrieving decision by TRA.

    The section clearly states that the applicant should appeal and that the section was not proper provision of law for the application.

    TICTS had also prayed to be granted an order that can operate its bank account normally in the cause of its business.

    The dispute revolves around decision by TRA's Large Taxpayers Department to serve the container handling company with a demand note, arguing that the payment of Sh6.5 billion disputed tax and threatened to invoke recovery measures.

    Earlier, TICTS had objected to the assessment by TRA against additional VAT for March 2007.

    It argued that it was not correct for TRA to demand payment of the whole of disputed tax without allowing the disputed result in procedures to be completed in accordance with the law, as there was already a pending notice of objection to the tax.

    TRA had insisted that "at no material time has it received an objection by TICTS and that there was no evidence of the purported notice of objection and to issue a notice to attach the TICTS bank account.
    TICTS unsuccessfully fought to keep the account out of TRA's reach.

    TRA had moved to seize the funds in the account after the revenue authority tax assessments revealed that TICTS was reportedly to have a tax liability of Sh6.5 billion.

    TICTS received additional VAT on provision of stevedoring services to foreign going ships Under Tanzania's tax laws, commercial banks are under obligation to release funds from clients' account as substantial sum to meet the full amount applied by TRA.