Legal Alert | Changes to Tax Dispute Resolution Process: Determination of Tax Objections


The Finance Act, 2020 (the Finance Act) which came into force on 1 July 2020 brought about significant changes to various legislations, among them, the Tax Administration Act, [CAP.438 R.E. 2019] (TAA). One of the key amendments introduced to the TAA was in relation to the tax dispute resolution process and more specifically in relation to the resolution of objections filed with the Tax Revenue Authority (TRA). The implications of the change have had significant impact on filing of objections and will continue to do so in the foreseeable future. We highlight below, salient features of the amendment to the TAA and the implications thereto to the various taxpayers.

Overview of the amendments

The Finance Act amended the TAA and introduced Section 52 (10) and Section 52(11) which states:

Section 52 (10) “The Commissioner General shall determine an objection to a tax decision within six months from the date of admission of the notice of objection”.

Section. 52 (11) “Where the Commissioner General fails to determine the objection within the time prescribed under subsection (10), the tax assessment or tax decision shall be treated as confirmed and the objector shall have the right to appeal to the Board in accordance with the Tax Revenue Appeals Act”.

Important considerations for taxpayers

The above changes imply that the Commissioner of TRA is obliged to determine an objection within six months of admission of an objection, failure of which, will result to the tax assessment to which the objection relates be deemed as a “confirmed assessment/decision”. The consequences of the tax objection being deemed as a confirmed assessment upon lapse of the six months is that the next available recourse for the affected taxpayer is appealing the confirmed assessment to the Tax Revenue Appeals Board (the Board) as discussed hereunder.

By way of example, assume that an objection for TZS 100 million (approx. USD 46.3 million) was admitted on 1 September 2020. If the Commissioner of the TRA failed to respond to the objection by 1 March 2021, the assessment would be deemed by operation of section 52(11) to have become a confirmed assessment. The taxpayer would then have 30 days from 1 March 2021 to file an appeal to the Board in accordance with the Tax Revenue Appeals Act, failing which there would be drastic consequences to the taxpayer’s case, as discussed in more detail below.

This issue poses significant risk for taxpayers who may not be keeping track of the 6 month timeline, noting that no action is required on the part of the Commissioner in order to crystallise this tax liability after the expiry of this period.

Having said that, in our view, there are certain aspects of the amendments that are not clear and which bring uncertainties in the application of the provisions.

To begin with, the TAA does not define what amounts to “the date of admission of an objection”.

Generally, in practice, after a taxpayer has filed an objection with the TRA, the TRA may or may not issue a letter to the taxpayer confirming that the objection has been admitted. Where the TRA has not communicated to a taxpayer as to whether the objection has been admitted, then there is likely to be confusion on the part of a taxpayer as to when the six months period begins to count.

Additionally, it would be noted that under Section 51 of the TAA, the Commissioner shall not admit an objection unless the taxpayer has paid one third of the tax assessed or tax not in dispute whichever is higher. In this regard, it can be argued that in absence of the Commissioner’s formal communication regarding the admission of an objection, the date of paying the advance tax may be deemed to be the date of admission of an objection. However, this is not clear from a plain reading of section 52(11) of the TAA.

In light of the above, a taxpayer who wishes to avoid the risk of disagreement with the TRA on the “date of admission of the notice of objection” may be well guided to take the conservative approach of counting the six month period as from the date of filing an objection, if there has been no communication from the TRA during this period.

Filing of appeals to the Tax Appeals Revenue Board

According to the Tax Revenue Appeals Act, a person who is aggrieved by an objection decision of the Commissioner may file a notice of appeal within 30 days following the date on which a notice of final determination of assessment is served to the taxpayer and a statement of appeal withing 45 days following the date on which a notice of final determination of assessment is served to the tax payer.

Following the amendments introduced by the Finance Act, where the Commissioner does not confirm an assessment within six months from the date an objection is admitted, the assessment would be deemed to be confirmed after the lapse of the six months deadline. Therefore, should a taxpayer wish to appeal against the TRA assessment to the Board, he will be required to file a notice of appeal and a statement of appeal within 30 days and 45 days respectively after the lapse of the six months deadline.

If a notice of appeal and a statement of appeal is not filed within the stipulated timeline, there is significant risk that the TRA could commence enforcement action against the taxpayer for the collection of the disputed taxes. While the Tax Revenue Appeals Act allows filing of these documents out of time, these circumstances are limited and require an approval from the Board.

On this basis, it is crucial for taxpayers to keep track of the six month period from the date an objection is admitted, to mitigate the risk of losing the right to appeal the TRA tax assessment and to prevent possible enforcement action, should the objection be deemed confirmed by lapse of time.

Why should taxpayers ensure that tax objections are resolved before the deemed determination date of six months period?

Given that the above amendments shift the burden to taxpayers when the Commissioner fails to determine the objection within the six months, it is our view that it is critical for taxpayers who have lodged tax objections with the TRA to follow up proactively with TRA to issue the tax decisions within the six months period. This is important as:

Our recommendation

We recommend that taxpayers be vigilant in ensuring that they receive TRA’s confirmation on the admission of an objection so that they can keep track of the 6 month period within which an assessment shall be deemed as confirmed and most importantly the date that will subsequently be used for filing an appeal to the Board.
We would be pleased to advise on additional practical steps that a taxpayer can take to proactively deal with the issues set out above.

Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Daniel Ngumy, Geofrey Dimoso, Juliana Mosha or Priscilla Githinji

Daniel Ngumy
ALN Kenya | Anjarwalla & Khanna
Geofrey Dimoso
ALN Tanzania | A&K Tanzania
Juliana Mosha
Senior Associate
ALN Tanzania | A&K Tanzania
Priscilla W. Githinji
Principal Associate
ALN Kenya | Anjarwalla & Khanna


The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.