LONDON-based giant gold mine company, African Barrick Gold Plc (AB G), has once again lost its appeal against being found to have evaded tax for four years consecutively from 2010, amounting to 81,843,1327 US dollars (over 160bn/-).
This follows the decision of the Court
of Appeal to “strike out” the appeal AB G, the appellant, currently
known as Acacia PLC, had lodged to fault the judgment issued on March
31, this year, by the Tax Revenue Appeals Tribunal on the matter.
Justices Edward Rutakangwa, Salum
Massati and Stella Mugasha ruled in favour of Commissioner General with
Tanzania Revenue Authority (TRA) after observing that the appeal by AB G
was incompetent for failure to include key documents in the records,
like documentary evidence tendered at the trial.
According to the justices, there was no
gainsaying here that the omission to include the documentary evidence
tendered at the trial does offend against the mandatory provisions of
Rule 96 (1) (f) and (2) of the Rules, which is clear and elaborate on
what the record of appeal should mandatorily contain.
“We have no flicker of doubt in our
minds that these documents are very necessary for conclusive
determination of the appeal. Being core or primary documents in this
appeal, failure to incorporate them in the record renders the (same)
incurably defective and the appeal incompetent,” they declared.
Among such documents were affidavits
read and all documents put in evidence at the hearing, the order if any
giving leave to appeal, the memorandum of appeal, record of proceedings,
the judgment or ruling, the decree or order and the notice of appeal.
The AB G business entities in Tanzania,
include Bulyanhulu Gold Mining Limited, North Mara Gold Mining Limited
and Pangea Minerals Limited, which operates the Tulawaka and Bunzwagi
Gold Mines.
It had declared dividends in UK to its
shareholders on the income generated from gold mines operated in
Tanzania amounting to 412,504,257 US dollars for 2010 to 2013 years of
income.
However, the AB G declared to have
incurred loss in Tanzania, where the three gold mine companies operate.
Nevertheless, the Tribunal composed of three members under the chairman
of High Court Judge Dr Fauz Twaib had stated in its judgment dated March
31, 2016; “Indeed, we share the (Tax Revenue Appeals) Board’s surprise
as to how could this be possible,” said the Tribunal.
The Tribunal dismissed the appeal lodged
by the company to challenge findings of the Board, saying it was
inconceivable that AB G could pay so much money in dividends for four
consecutive years, while its only assets were the three loss-making
entities incorporated in Tanzania that do not make any profit. “The
Board expected some clarification of this rather strange state of
affairs and proof as to how it could be possible.
That proof, unfortunately, was not
forthcoming from the appellant and its witnesses and counsel’s
explanation fell short of an adequate discharge of relevant burden,” the
Tribunal observed.
One important issue and which had
attracted fierce criticism from the appellant’s counsel stems from the
Board’s acceptance of the contention by the Commissioner General of the
Tanzania Revenue Authority (TRA), the respondent, that AB G had serious
plans to avoid tax.
The Tribunal found that the Board
reached such conclusion relying on the fact that all the appellant’s
subsidiaries in Tanzania were loss making and therefore not paying
dividends to its shareholders and yet at the same time the AB G has
consistently been declaring dividends.
“In the circumstances, it is fair to
conclude that the respondent’s argument that the transactions were
simply a design created by the appellant (AB G) aimed at tax evasion was
justified,” the Tribunal declared.
According to the Tribunal, since the
company’s only entities that carry on business anywhere in the world
were the three Tanzanian gold-mining companies, the AB G’s only source
of revenue that could create net profits retained earnings would be the
three Tanzanian companies.
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