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Cancellation of Tax Amnesty Regulations: What Went Wrong? 

The government should come up with a refined document that takes into consideration not only the challenges that previous regulations posed but also the prevailing local and global economic situations. 

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On May 8, 2020, in a bid to encourage voluntary tax compliances, the government issued the Tax Amnesty Regulations known as the Tax Administration (Remission of Interests and Penalties) Regulations, 2020 vide the Government Notice Number 351 of 2018.

The Regulations provide on how the tax amnesty on interest and penalties should be requested, persons and types of interest and penalties eligible for a waiver, manner of payment of principal tax whose interest and or penalty is waived and interest and penalties which do not qualify for applications of the said waiver. They also provided for the cancellation of granted waiver in case the same was acquired fraudulently or through misrepresentation.

The Tanzania National Business Council (TNBC’s) meeting of March 28, 2018, under the chairmanship of the former President John Magufuli, inspired these regulations. During the meeting, members from Tanzania’s business community lamented the heavy tax burden, especially regarding penalties and interests from previous years. They thus asked to be allowed to pay principal taxes and not the additional penalties and interest coming with their tax liabilities.

The Parliament then, after three months since the TNBC’s meeting, amended the Tax Administration Act, 2015 to empower the Minister of Finance and Planning to make regulations on eligibility, duration and procedure of accessing the said tax waivers on interest and penalties. This was a good move and highly commended by the majority of the business community as it had the intention of ensuring a conducive business environment.

The limited role of the minister

But the role of the minister, according to the Tax Administration Act, is limited only to the making of the regulations. The one responsible for granting tax amnesty wholly or in part is the Commissioner-General of the Tanzania Revenue Authority (TRA). The Commissioner-General will take the decision upon being satisfied that there is ‘good cause’ to remit the said interest or penalty imposed under any tax law.

The tax amnesty provided by the government through the regulation above notwithstanding not all business people voluntarily went to ask for the waiver on the said interest and penalties accrued from their tax liabilities. In May 2021, Deputy Minister of Finance and Planning Mr Hamad Yussuf Masauni revealed in the Parliament that members of the business community were still sceptical about paying the principal taxes. He said businesspeople were also not requesting any waivers contemplated by the regulations.

Some theories suggest that the reason behind this is solely on the restrictive application of the said law contrary to what was contemplated by the business community. The practice is that a taxpayer could apply for remission of interest or penalty even on tax liabilities established as a result of tax audit or investigation by the TRA provided that a business convinces the taxman that there was a good cause for nonpayment of the said taxes.

The new regulations, however, only restricted the waiver of interest or penalty on voluntary disclosure by a taxpayer, not on audits or investigations which are prevalent.

The power of the Commissioner-General

Under the Tax Administration Act, TRA Commissioner-General is empowered to audit or investigate a person’s tax affairs having regard to that person’s history of compliance or noncompliance with any tax law, the amount of tax payable by that person, the class of business or other activity conducted by that person, or any other matter that the Commissioner-General considers relevant for ensuring the collection of tax due.

Practically speaking, it is very rare for a person to lament on a tax liability which he or she can voluntarily disclose. Most of the tax complaints or disputes are always due to TRA audits and investigations hence removing them from the scope of the waiver application, it’s unlikely that you will get one to request for the waiver.

Secondly, the regulation restricted the Commissioner-General not to waive the following categories of interest or penalty: penalty or interest emanating from an order of compounding an offence under tax law; interest or penalty arising out of breaches related to acquisition or use of electronic fiscal devices; and penalty or interest arising from fraudulent evasion of tax.

Others are interest or penalty arising from tax liability established as a result of tax audit or investigation; interest or penalty arising from failure to pay income tax payable by way of withholding tax, value-added tax; excise duty, airport service charge, port service Charge, or any other tax liability which the applicant has a statutory obligation to pay.

In essence, the regulations limited the relevancy of Section 70 of the Tax Administration Act, 2015 which allowed for waiver of interests and penalties. One might argue that this was not a motive behind the provision. It is understandable that the government wanted to grant waivers while still maintaining revenue collections, something which practically would not work.

Some observers also note that the regulations did not take into account some factors that are beyond the taxpayer’s control. TRA themselves are accused of taking longer time to complete an audit than could reasonably have been expected or when a  taxpayer relied on the judicial interpretation that was later overturned by the Higher Courts.

Tax practitioners’ point of view

Tax practitioners thought that instead of making such restrictive provisions on the law, the criteria and considerations for remission should have been left with Commissioner-General who would have a broad discretion to waive where the circumstances make it fair and reasonable to do so. Instead, here the commissioner strictly interpreted the law.

On September 23, 2021, the Minister of Finance via the Government Notice No. 713 revoked the regulations discussed above. It is presumed that the restrictive nature of the regulations was among the reasons for a low turnout of taxpayers to settle their taxes liabilities hence it proved futile, a presumption that may be rebuttable.  

The decision to revoke the regulations comes at a time when they are most needed, considering the prevailing COVID-19 pandemic that continues to wreak havoc on the economy. The government should therefore come up with a refined document that takes into consideration not only the challenges that previous regulations posed but also the prevailing local and global economic situations.

A tax regime that is in line with international standards will not only increase revenues but will as well create a good business environment and influx of foreign direct investments.

Emmanuel is experienced in commercial and corporate law transactions and advisory. He can be reached through or follow him on Twitter at @EsquireMK. These are the writer’s own opinions and do not necessarily reflect the viewpoints of The Chanzo Initiative. Want to publish in this space? Contact our editors at for further inquiries.


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