Examining the legality of business licence fees - II

Ayoub Mtafya 

By Ayoub Mtafya

In Summary

Having summarised the findings of the article mentioned above, let us share the development on the status of business licence fees since then especially on our call for the government to regularise the charging of fees.

In The Citizen on Sunday dated April 20, 2014, I shared my research findings on the legal basis of business licence fees which were imposed by the government in July 2013. In the article I concluded that the business licence fees as introduced by the Finance Act, 2011 by amending the Business Activities Registration Act, 2007 were illegal.

My conclusion was based on reasons that the Business Activities Registration Act, 2007 which was mentioned by the Finance Act 2011 as the basis for the fees was not in force and as such the same law couldn’t have been the basis of the new licensing fees.

The second reason was that the appropriate law to introduce the licensing fees would have been the Business Licensing Act No 25 of 1972.

However, as of April 20, 2014 there was no law which reintroduced the licensing fees following the abolition of the fees in the year 2004 by the provisions of section 5 of the Finance Act, 2004.

As such, charging fees based on that law wasn’t proper. The final reason was that the local authorities and the central government were charging fees based on a document titled “Regulations to the Application of Business Registration Act, Miscellaneous Amendment 2011-First Schedule: Business Licences Fees”.

However, there was no law or regulation under that title at that time, secondly, the fee schedule was a replica of the fee schedule which was made under section 8 of the Business Licensing Act No 25 of 1972 as amended by the Finance Act No. 18 of 2002, but this is the schedule which was abolished in the year 2004.

Having summarised the findings of the article mentioned above, let us share the development on the status of business licence fees since then especially on our call for the government to regularise the charging of fees.

Much as I wish the government would not have reintroduced the licence fees, I am pleased to share with the readers who may not be aware that by the provisions of the Finance Act, 2014 which came into force on July 1, 2014, the government rectified the anomaly mentioned above by amending section 8 of the Business Licensing Act No 25 of 1972.

A fee schedule made under section 8 of the Business Licensing Act No 25 of 1972 has been introduced. The schedule is clear about the fees which are chargeable by the central government and those which are to be charged and collected by the local government.

The amendment confirms our findings that the law applicable as far as business licensing and the fees are concerned is the Business Licensing Act No 25 of 1972 and not the Business Activities Registration Act, 2007 which for the reasons known to the government has not come into force since its enactment.

I mentioned that I’m pleased of the introduction of the fees by the Act of Parliament (the Finance Act, 2014) because Article 138 (1) of the Constitution of Tanzania is very clear that “No tax of any kind shall be imposed save in accordance with the law enacted by Parliament or pursuant to a procedure lawfully prescribed and having the force of law by virtue of a law enacted by Parliament”.

Much as the constitution mentions the word ‘tax’ and not ‘fees’, a fee is related to a tax, in that it is also a charge paid to the government by individuals or by a business and therefore it has to be backed by the provisions of the law.