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After Traders’ Strike, Envoys Call for Dialogue Citing Unfair Tax Practices to Investors and Arbitrary Freezing of Bank Accounts in Tanzania

The letter also shows that TRA officials are using threats to pressure investors into submitting to its demand.

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Following a trader’s strike that lasted for four days, from June 24, 2024, to June 27, 2024, spreading across nine regions, with the main complaints around tax systems, several envoys have also requested dialogue with the Ministry of Foreign Affairs, Minister of Finance, Minister of Investment and Planning, Minister for Industry and Trade and the Commissioner General of TRA to discuss challenges that investors face.

“Many of our investors are encountering significant disruption due to unevidenced notices from the TRA demanding payments and account reconciliations dating back up to 15 years. Many businesses have faced ‘bank agency notices’ that freeze accounts, halt operations and negatively impact employee salaries and supplier cashflow,” reads part of the letter that The Chanzo has seen.

The envoys also say that TRA has refused to recognize tax concession agreements that investors have entered with the Tanzania Investment Centre and ministries saying the agreements are not gazetted. The letter also shows that TRA officials are using threats to pressure investors into submitting to its demand.

The letter explains: “Investors also report that TRA agents levy extraordinary tax bills not supported by Tanzanian law, threaten investors and Tanzanian partners when companies protest or appeal these practices, and freeze or seize bank accounts and company assets without notification nor timely legal recourse.”

The letter is signed by ten envoys including Michael A. Battle Sr. Ambassador of the United States of America to Tanzania;  David Concar, British High Commissioner; Wiebe de Boer, Ambassador of the Kingdom of Netherlands;  Mags Gaynor, Chargé d’affaires and Deputy Ambassador of Ireland; Nabil Hajlaoui, Ambassador of France; Peter Huyghebaert, Ambassador of Belgium to Tanzania; Kyle Nunas, Canadian High Commissioner; Seungyun Lee, Chargé d’affaires and Deputy Ambassador of Korea; Charlotta Ozaki Macias, Ambassador of Sweden and Thomas Terstegen, Ambassador of the Federal Republic of Germany.

It is worth noting that most items listed in the letter are similar to what traders have complained about. One of the issues that traders raised is the TRA practice of issuing agency notices and taking money from traders’ bank accounts.

This practice was prevalent during the fifth phase of government under Magufuli, but when President Samia came into power, she committed to reforming the business environment and many stakeholders reported that there is a positive development in the environment. The recent traders’ and investors’ complaints might signal that the old challenges are resurfacing in the business environment.

In the new budget for the financial year 2024/25, the government has committed to ensuring a conducive business environment for investors and other businesses

Responding to the letter, the Minister of Foreign Affairs has agreed to set up a dialogue between the envoy and the other parties and also welcome the investors who are facing challenges.

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