TANZANIA: PWC has said the introduction of the office for Tax Ombudsman is a welcome change in solving tax disputes to increase payment.
The principal mandate of the Tax Ombudsman was limited to addressing taxpayers’ complaints on tax administrative matters.
In practice, PwC said in its National Budget Bulletin 2024 for Tanzania, that the Tax Ombudsman facilitates amicable settlements and their recommendations are not binding to parties.
“This may help to fasttrack resolution of pending tax disputes and hence the early collection of taxes,” PwC said in the budget report dubbed ‘Catalysing Growth and Inclusion.
’ The Finance Act 2019 established the office of Tax Ombudsman with the respective Regulations issued in March 2022 and the set-up of the office earlier this year.
And, last Thursday, the Minister for Finance Dr Mwigulu Nchemba while tabling the national budget 2024/25 proposed to empower further the Tax Ombudsman.
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The Budget speech proposes to introduce provisions that empower the Tax Ombudsman in hearing and addressing complaints emanating from tax decision, procedural, service and administrative matters relating to tax decisions or objections.
“This is a welcome change as it broadens the scope of matters that can be dealt with by the Tax Ombudsman. “Therefore,” PwC said “we will await to see how this is covered by the Finance Bill as some aspects [such as time limits] are not clear from the speech.” Additionally, the budget speech limits the maximum fine for the failure to issue a fiscal receipt to 1,000 currency points. “The fine is equivalent to 15m/-, using current value and 20m/-, based on the proposed increase of the value of the currency point.
This was changed in the Finance Act 2023 to the highest of 20 per cent of the value of the supply or 100 currency points so in a way it is a reduction in the maximum penalty and should ease some challenges during tax audits.
The 2024/25 budget of 49.5tri/- includes tax revenue of 29.4tri/- and 3.8tri/-, representing a respective increase of 10 per cent and 13 per cent of the original budget and projected outturn for 2023/24 budget.
The measures to increase revenues include additional import taxes—including an increase of Railway Development Levy up to 2.0 per cent and a new 10 per cent “Industrial Development Levy” to be charged on certain imports (other than from the EAC) including beer and energy drinks.
Also, excise duty changes including 10 per cent duty on betting stakes to help fund the National Health Insurance Fund, which will also be funded by an allocation of 2.0 per cent of excise collections from soft drinks, cosmetics and alcohol, 10 per cent duty on advertisement fees and most intriguingly the extension of excise duty to chilli sauce, mango pickle and tomato sauce.
Further measures to tax the digital economy include digital content creation and digital asset transactions and more restrictive application of deferral of brought forward tax losses.
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