THISDAY REPORTER
Dar es Salaam
THE Chief Secretary, Philemon Luhanjo, has intervened to help convince Mlimani Holdings Limited carry on with the multi-billion shillings Mlimani City project whose progress has been proceeding at a snails pace.
Documentary evidence availed to THISDAY indicate that Mr. Luhanjo called several emergency meetings at State House last year, to help rescue the project following MHLs majority shareholders from Botswana threatening to withdraw.
According to a copy of a report on the negotiations and signing of a performance contract for the Mlimani City project between the government and MHL held in Gaborone, Botswana last July, the CS meetings ended up in formation of a technical team to rescue the project.
The investor had complained against non fulfillment of certain conditions including 100 per cent capital allowance, carrying forward of losses and delays in completing the ultra-modern Sam Nujoma Highway on schedule.
The team comprised of permanent secretary from Treasury, Tanzania Investment Centre executive director, the Tanzania Revenue Authority?s large taxpayers? commissioner, the director of Investments and Resource Mobilization from the University of Dar es Salaam, a legal counsel of UDSM, and an appointee of PS Ministry for Infrastructure Development,? the report said.
The technical team first met last June and adopted a list with five items of the agenda which focused on addressing the investors? concerns including; withholding tax on foreign consultancy, interest on loan repayments, rentals, 100 per cent capital allowance write-offs and custom duty and value added tax waivers.
?The technical reasons for not issuing a government notice on 100 per cent capital allowance are well explained by the Commissioner of Large Taxpayers in the minutes of the rescue team composed by the CS to resolve this matter,? the report prepared by a group of lawyers who attended the Gaborone meeting said.
The lawyers, A.S.Kagomba from TIC, E. Mwankenja from the Treasury and N. Mwaikambo from the Attorney General?s Chambers, pointed out in their report that there were problems in implementing the National Investment Steering Committee?s decisions made in 2005 because of various reasons, including delays in GN publications to legitimize such perks.
The NISC had agreed in Dodoma in July 2005, to approve exemptions on withholding tax on loan interest for all foreign loans, withholding tax on consultancy fees, 100 per cent capital allowance and the carrying forward of losses indefinitely according to the Income Tax Act of 2004.
?According to the approved minutes of this meeting (item No. 6.1 (i) to (iv), NISC made the following decisions on request of incentives: Rejected a request for exemption of withholding tax on leases because the obligation to pay this is on the tenants and not MHL,? the report stated.
The Botswana investor, Gulaam Abdoola, is proprietor of MHL which had earlier pledged to construct the Mlimani City property development project worth $80m.
The project which is supposed to include construction of a shopping complex, office park, hotel and residential properties is financed by International Financial Services Centre (IFSC) of Botswana.
Since the launching of the initial phase by President Jakaya Kikwete in November 2006, has almost stalled after the construction of grand level shopping malls and single unit residential houses.
Dar es Salaam
THE Chief Secretary, Philemon Luhanjo, has intervened to help convince Mlimani Holdings Limited carry on with the multi-billion shillings Mlimani City project whose progress has been proceeding at a snails pace.
Documentary evidence availed to THISDAY indicate that Mr. Luhanjo called several emergency meetings at State House last year, to help rescue the project following MHLs majority shareholders from Botswana threatening to withdraw.
According to a copy of a report on the negotiations and signing of a performance contract for the Mlimani City project between the government and MHL held in Gaborone, Botswana last July, the CS meetings ended up in formation of a technical team to rescue the project.
The investor had complained against non fulfillment of certain conditions including 100 per cent capital allowance, carrying forward of losses and delays in completing the ultra-modern Sam Nujoma Highway on schedule.
The team comprised of permanent secretary from Treasury, Tanzania Investment Centre executive director, the Tanzania Revenue Authority?s large taxpayers? commissioner, the director of Investments and Resource Mobilization from the University of Dar es Salaam, a legal counsel of UDSM, and an appointee of PS Ministry for Infrastructure Development,? the report said.
The technical team first met last June and adopted a list with five items of the agenda which focused on addressing the investors? concerns including; withholding tax on foreign consultancy, interest on loan repayments, rentals, 100 per cent capital allowance write-offs and custom duty and value added tax waivers.
?The technical reasons for not issuing a government notice on 100 per cent capital allowance are well explained by the Commissioner of Large Taxpayers in the minutes of the rescue team composed by the CS to resolve this matter,? the report prepared by a group of lawyers who attended the Gaborone meeting said.
The lawyers, A.S.Kagomba from TIC, E. Mwankenja from the Treasury and N. Mwaikambo from the Attorney General?s Chambers, pointed out in their report that there were problems in implementing the National Investment Steering Committee?s decisions made in 2005 because of various reasons, including delays in GN publications to legitimize such perks.
The NISC had agreed in Dodoma in July 2005, to approve exemptions on withholding tax on loan interest for all foreign loans, withholding tax on consultancy fees, 100 per cent capital allowance and the carrying forward of losses indefinitely according to the Income Tax Act of 2004.
?According to the approved minutes of this meeting (item No. 6.1 (i) to (iv), NISC made the following decisions on request of incentives: Rejected a request for exemption of withholding tax on leases because the obligation to pay this is on the tenants and not MHL,? the report stated.
The Botswana investor, Gulaam Abdoola, is proprietor of MHL which had earlier pledged to construct the Mlimani City property development project worth $80m.
The project which is supposed to include construction of a shopping complex, office park, hotel and residential properties is financed by International Financial Services Centre (IFSC) of Botswana.
Since the launching of the initial phase by President Jakaya Kikwete in November 2006, has almost stalled after the construction of grand level shopping malls and single unit residential houses.
