Tanzania: Court Dismisses Ophir Tanzania's 18.4bn/ - Appeal With Costs


JF-Expert Member
Dec 16, 2006
Tanzania: Court Dismisses Ophir Tanzania's 18.4bn/ - Appeal With Costs - allAfrica.com

9 AUGUST 2021

Tanzania Daily News (Dar es Salaam)

Credit: Faustine Kapama

THE Court of Appeal has dismissed with costs the appeal by United Kingdom (UK) established mineral giant company, Ophir Tanzania (Block 1) Limited, challenging 18.4bn/- withholding tax payments to the Tanzania Revenue Authority (TRA) for services rendered offshore by non-residents.

Justices Ferdinand Wambali, Lugano Mwandambo and Lilian Mashaka ruled against Orphil Company, the appellant, after holding that the two grounds of appeal lodged to support the appeal in question lacked legal merits.

They found that the Tax Revenue Appeals Tribunal (Tribunal), which had decided in favour of the Commissioner General of TRA, the respondent, properly and correctly confirmed the decision of the Tax Revenue Appeals Board (Board) on the matter.

"Consequently, we hold that the two grounds of appeal are without substance. In the circumstances, considering our deliberation, we find that the appeal is devoid of merit, and we hereby dismiss it with costs," they declared.

The decision put to an end the appellant's effort to oppose the 18,368,593,534/- payments.

In the impugned decision, the tribunal held, among others that the services the appellant imported from the non-resident persons were rendered in Tanzania and the payment of service fee paid by the appellant to nonresident persons had a source in Tanzania.

The tribunal also held that the place of performance of the services or place of rendering of services is not a determinant factor of the source of payment of service fees.

In addition, the tribunal had ruled that the appellant had an obligation to withhold tax for payments made to its nonresidents' service providers or suppliers in respect of service rendered to its non-resident service providers or suppliers outside Tanzania but utilised in Tanzania.

Counsel for the appellant had complained that the tribunal erred in law in holding that irrespective of place of rendering services as the payment was made by the appellant, who is a resident in Tanzania, for services utilized in the United Republic, are subject to withholding tax under the Income Tax Act, 2004.

They submitted that the tribunal erred in law by confirming the Board decision that the appellant's company had obligation to withhold tax for the payments made to its non-resident service provider outside the United Republic of Tanzania for services utilized in the United Republic under the Act.

The complaints in both grounds of appeal rested on the alleged wrong interpretation by the Tribunal of section 69 (i) (ii) read together with sections 6 (1) (b) and 83 (1) (b) of the Income Tax Act, which resulted in alleged erroneous finding with regard to the payment of withholding tax.

During the hearing session, the counsel for the appellant had invited the appeals court to depart from the findings in the case of Tullow Tanzania Bv reached in a similar situation, a position which was vehemently opposed by state lawyers, who appeared for the respondent.

In their judgment delivered in Dar es Salaam recently, the justices of the appeals court, the highest temple of justice in Tanzania respectfully found the invitation as eluded by the appellant's counsel as totally misplaced.

"This is so because apart from not finding any patent error in the decision, it is not within the jurisdiction of the Full Court to depart from the decision of the same Court, however erroneous it might be," they said.

Besides, it was their position that in view of the settled position of the law by the Court on complaints relating to the interpretation of the Act that the Tribunal properly followed the respective decision to hold that the appellant was duty bound to withhold tax on payments that were made to non-residents.

The dispute between the parties emanated from the audit which was conducted by the respondent, the Commissioner General, Tanzania Revenue Authority (the CG-TRA) in March 2014 on the appellant covering the years of income 2010 - 2013. It is in the record of appeal that in the said audit the respondent found that there was a difference between the appellant's figures on imported services reported in the Value Added Tax (VAT) returns compared to those reported in the withholding tax returns for the requisite years under the audit.

Noteworthy, after several communications between the parties, it seemed that efforts to sort out the dispute on the findings did not yield fruits.

Consequently, on September 30, 2014 the respondent issued the appellant with a withholding tax certificate demanding payment of 18,368,593,534/-being principal tax and interest due. Aggrieved by the decision of the respondent, the appellant filed an appeal before the TRAB, which was however, dismissed in its entirety. The appellant's further appeal to the TRAT was equally dismissed. It was at that point in time when the appellant decided to take the matter to the Court of Appeal.



JF-Expert Member
Nov 26, 2018
Hii withholding TAX imekaaga vibaya sana.Unapoona Unafanya malipo halafu hayaoneshi kodi hakikisha kwamba sio significant kwani yakiwa significant yanakuwa na TAX implications.Unapokuja kureport kama expenses NDO pale unawaona TRA wachawi wanadai madeni ya nyuma kumbe ni wewe ndo umewafungulia mlango.

Hata hivyo hii kampni kubwa hivi ilipaswa kufahamu hili takwa la kisheria unless foreigners wana exemption fulani.Au iwapo waliripoti haya matumizi ndivyo sivyo katika jitihada za kutaka kuiibia serikali


JF-Expert Member
Dec 21, 2016
Is there and advocate who can assist me here? I habe been told to write a request letter to distric court so that i can be able to appeal. Anyone who are free to help pls


Platinum Member
Oct 11, 2006
Is there and advocate who can assist me here? I habe been told to write a request letter to distric court so that i can be able to appeal. Anyone who are free to help pls
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