Tata Africa Holdings Tanzania Limited vs Commissioner General Tanzania Revenue Authority (Civil Appeal No. 229 of 2025) [2026] TZCA 601 (22 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: NPIKA, J.A., MASHAKA. J.A. And NGWEMBE. 3.A.) CIVIL APPEAL NO. 229 OF 2025 TATA AFRICA HOLDINGS TANZANIA LIMITED ............................. APPELLANT VERSUS COMMISSIONER GENERAL TANZANIA REVENUE AUTHORITY .............................................. RESPONDENT (Appeal from the Judgment and Decree of the Tax Revenue Appeals Tribunal at Dar es Salaam) (Nqimilanaa. Vice-Chairperson. Mkasiwa and Zuber. Tribunal Members) dated the 10th day of July, 2025 in Tax Appeal No. 177 of 2024 JUDGMENT OF THE COURT 1st December, 2025 & 22n d May, 2026 MASHAKA. J.A.: This is an appeal against the decision of the Tax Revenue Appeals Tribunal (the Tribunal) sitting at Dar es Salaam, delivered on 10th July 2025, in Tax Appeal No. 177 of 2024. The Tribunal upheld the decision of the Tax Revenue Appeals Board (the Board) which confirmed the assessment issued by the respondent, Commissioner General Tanzania Revenue Authority (CG TRA) subjecting mobile telephone charges i amounting to TZS. 116,553,532.80 to Pay as You Earn (PAYE) and Skills Development Levy (SDL) for the year of income 2019 - 2020. A brief account is that, the respondent conducted a tax audit on the appellant for the year 2019 - 2020. During the audit, the respondent compared the appellant's financial records with its payroll returns. It was discovered that certain emoluments paid to employees, including mobile telephone benefits amounting to TZS. 116,553,532.80, were reflected in the financial statements as part of employee emoluments but had not been included in the payroll for PAYE and SDL purposes. Consequently, the respondent issued assessments demanding PAYE and SDL on the said amount. The appellant objected, arguing that the mobile telephone charges were incurred for business purposes and paid directly to telephone suppliers, not to the employees, thus should be excluded under section 7 (3) (d) of the Income Tax Act. During the objection stage, the appellant did not produce any invoices from the telephone service providers to substantiate its claim. The respondent issued a final determination upholding the assessment. The appellant appealed to the Board. Before the Board, the appellant sought to tender invoices for the mobile telephone charges that had not been produced earlier, claiming they had been retrieved after the appeal was filed. The Board refused to admit those invoices, finding that no reasonable ground had been given for the late production. The Board then confirmed the assessment. Aggrieved, the appellant appealed to the Tribunal. It raised three grounds of appeal, challenging the Board's decision on both procedural grounds; the refusal to admit new evidence and substantive legal grounds on the interpretation of the Income Tax Act regarding the taxability of mobile charges. The Tribunal dismissed the appeal based on the reason that, even though rule 16 (5) of the Tax Revenue Appeals Board Rules, 2018 (the Rules) allows the Board to admit new evidence but the appellant failed to substantiate evidence on her failure to tender the said invoices during assessment and objection stages. Despite the finding of the Tribunal on import of section 7 (3) (d) of the Income Tax Act, the Tribunal concluded that the appellant's failure to provide evidence undermined the application of this provision. The Tribunal upheld the Board's decision, finding that the appellant had not provided justifiable reasons for the late production of the invoices and that, in any event, the mobile telephone benefits paid to employees were properly adjudged subject to PAYE and SDL. The appellant aggrieved with the Tribunal's decision, preferred the present appeal on the following grounds: a) That the Tax Revenue Appeals Tribunal erred in law by holding that the mobile telephone charges amounting to TZS 116,553,532.80 are subject to the appellant's PAYE and SDL computations for the year 2019 - 2020 contrary to section 7 (3) (d) o f the Income Tax A ct Cap 332. b) That the Tax Revenue Appeals Tribunal erred in law by holding that the Tax Revenue Appeals Board was correct to deny the admission o f invoices from the suppliers o f telephone services. c) That the Honourable Tax Revenue Appeals Tribunal erred in law by failing to exercise its power and duty vested under section 24 (1) o f the Tax Revenue Appeals A ct Cap 408 R.E 2023. At the hearing of the appeal, Mr. Nasri Hassan and Ms. Lucy Kiyangi, learned advocates appeared to represent the appellant whereas, the respondent had the services of Messrs. Chizaso Minde, Trofmu Tarimo and Nicodemus Agweyo, all learned State Attorneys. Both parties filed their respective written submissions pursuant to rule 106 (1) and (7) of the Court of Appeal Rules, 2009 (the Rules). In support of the appeal, Mr. Hassan prayed to adopt his written submissions. He commenced to address jointly grounds two and three, arguing that the Tribunal erred in upholding the Board decision on refusal to admit invoices from telephone service suppliers. The learned counsel acknowledged that the invoices were not submitted during the objection stage at the Commissioner General's level. He explained that they were misplaced and subsequently retrieved after the appeal was filed. Relying on rule 16 (5) of the Tax Revenue Appeals Board Rules, 2018, the learned counsel contended that, the Board had discretionary power to admit new documents with justifiable reasons. Furthermore, section 23 (1) of the Tax Revenue Appeals Act (now section 24 (1) Cap 408 R. E. 2023) imposes a duty on both the Board and Tribunal to admit any document that would assist in deliberations and ensure justice is done, he insisted. He argued that, the Tribunal failed to exercise this statutory power, thereby making an unjust decision based on an incomplete factual record. Regarding the first ground of appeal, Mr. Hassan submitted that section 7 (3) (d) of the Income Tax Act (now section 17 (3) (d) Cap 332 R. E. 2023) explicitly excludes from PAYE and SDL calculations of any amount expended wholly and exclusively in the production of employment income. He maintained that, the mobile telephone charges were incurred for business purposes and paid directly to telephone suppliers, not to employees. Notably, the Tribunal itself admitted that the appellant's financial statements reflected those costs as mobile telephone charges. The learned counsel argued that even without invoices, the Tribunal's own admission confirms the business nature of those expenses, and the lack of invoices should not negate that undisputed fact. Accordingly, the learned counsel prayed to the Court to allow all grounds of appeal, quash the Tribunal's decision, and set aside the inclusion of the mobile telephone charges in PAYE and SDL computations. On the part of the respondent, in reply, Mr. Minde also adopted the contents of the written submissions and opted to argue first on grounds 2 and 3 of appeal. He argued that the appellant conceded that, it failed to submit mobile telephone charge invoices during the objection stage before the Commissioner General. When it later sought to introduce those invoices before the Board under rule 16 (5) of the Tax Revenue Appeals Board Rules, 2018 (the TRAB Rules), the Board rightly refused because the appellant failed to provide sufficient or reasonable justification. The appellant's counsel merely stated that the documents were retrieved after an appeal, without any evidence of how, when, or where the invoices were misplaced or recovered. The learned State Attorney, emphasized that submission by the learned counsel is not evidence, citing Joao Oliveira and Another v. IT Started in Africa Limited and Another, Civil Appeal No. 186 of 2020 (unreported). The Tribunal correctly confirmed the Board's decision, noting that no independent or documentary proof of misplacement was ever adduced, he added. The learned State Attorney further contended that the appellant cannot change her story at the Tribunal level as the explanation of misplacement was never raised before the Board. Finally, he argued that rule 17 of the TRAB Rules allowing the Board to do away with technicalities and formality in proceedings does not give a free pass to ignore statutory obligations under section 62 (5) and (6) of the Tax Administration Act, which requires an objection to be accompanied by relevant documents. The appellant was reminded to provide evidence but failed to do so, and no counter-proposal was filed, he stressed. Reverting to ground one of the appeal, Mr. Minde submitted that, the appellant misinterpreted section 7 (3) (d) of the Income Tax Act. That provision excludes from employment income only those reimbursements where the employee himself incurs the expense wholly and exclusively for producing his income. Here, the appellant paid mobile telephone benefits directly to the employees (or on their behalf), and the same were reported as part of employees' emoluments in the appellant's financial records. The appellant never disputed during the audit that those amounts formed part of emoluments. Therefore, under section 7 (1) and (2) (a) of the ITA, such payments are gains or profits from employment and are subject to PAYE. Similarly, under section 14 of the Vocational Education and Training Act (Cap. 82), the same emoluments form the basis for Skills and Development Levy (SDL). The learned State Attorney further invoked regulation 4 (a) and (b) of the Income Tax Regulations (GN No. 464 of 2004) that, an employer's expenditure for the benefit of employees is not wholly and exclusively for production of income unless it is included in the employee's taxable income or is so small as to be administratively impracticable to account. Here, the appellant did not include those mobile telephone benefits in PAYE and SDL computations, and the amount TZS 116,553,532.00 is not negligible. The learned State Attorney reminded the Court that under section 19 (2) (b) of the Tax Revenue Appeals Act, the burden rests on the appellant to prove that an assessment is excessive or erroneous. The appellant failed to adduce admissible evidence, the invoices were never properly admitted and thus did not discharge that burden. Consequently, he prayed to the Court to confirm the Tribunal's decision and dismiss the appeal with costs. Having heard both parties for and against the appeal and carefully examined the record of the appeal, our determination commencing with grounds two and three of appeal hinges on the interpretation of rule 16 (5) of the TRAB Rules and section 23 (1) of Cap 408 which is on powers of the Board and Tribunal to admit evidence which was not tendered before it. The powers conferred to the Board under rule 16 (5) of the TRAB Rules states: "Except with the consent o f the Board, and upon such terms and conditions as the Board may determine, the appellant shall not a t the hearing rely on any ground other than the grounds stated in the a p p e a l and shall not adduce any evidence other than the evidence which was previously made available to the Commissioner General. "(Emphasis added) This rule creates a clear presumption against the admission of new evidence. The burden is squarely on the appellant to not only seek the Board's consent but also to provide compelling, evidence-based reasons for their failure to submit the documents during the audit and objection stages which are the primary fact-finding phases of the tax dispute process. Further, the word "consent" implies a discretion to be exercised judiciously. The Board is not obliged to admit every document belatedly tendered; it must be satisfied that there are justifiable reasons. Here, a bare assertion by learned counsel, without more, does not constitute a justifiable reason. In the present appeal, without a doubt, the appellant did not provide any plausible circumstances that hindered them to present the invoices during audit and objection proceedings. The appellant introduced that fact in its submission before the Board at page 102 of the record of appeal. The appellant's explanation before the Board was that, they retrieved the documents after the appeal. No further details were provided: on how the documents were lost or discovered, where they were found, who had possession, or any independent evidence of misplacement. The Board found that the appellant had not given reasonable grounds for the failure to tender the invoices during the audit and objection stages. The Tribunal, upon review, confirmed that finding, adding that there was no direct or independent evidence to substantiate the alleged misplacement; the explanation was merely a statement by the learned counsel during submissions, a finding which was upheld by the Tribunal. We however, agree with the argument of the learned State Attorney that, submissions are not evidence as we observed in Joao Oliveira and Another v. IT Started in Africa Limited and Another (supra). Therefore, the manner the appellant tried to introduce the invoices as evidence during the submission is not correct, leave alone the reason for their default. In the absence of any evidentiary foundation, the Board and the Tribunal were perfectly entitled to decline the exercise of discretion in favour of the appellant. Furthermore, Mr. Hassan relied on section 23 (1) [now section 24 (1) of the TRAA 2023 Cap. 408] which vests power and duty in the Tribunal to receive additional evidence or to call any person to give evidence if it believes such evidence will assist in its deliberations. The said provision reads: "On the hearing o f an appeal\ the Tribunal may, if it thinks fit ■ call for and receive evidence in addition to the evidence brought before the Board." The above cited provision does not obligate the Tribunal to admit documents that have been improperly withheld or for which no valid justification has been given. The discretion remains with the Tribunal. In this appeal, the Tribunal considered the appellant's request and declined to admit the invoices because the appellant had not discharged the threshold of showing justifiable reasons. The Tribunal was not failing to exercise its power; it was properly exercising its discretion to refuse admission based on a lack of a credible explanation. ii In addition, Mr. Hassan contended that rule 17 of the TRAB Rules provides that the Board shall not be bound by procedural formalities or technicalities and should have been applied to admit the documents in the interest of substantive justice. Much as we would agree, however, we are of the view that, procedural informality does not mean that statutory obligations can be ignored. Section 62 (5) and (6) of the Tax Administration Act, Cap 438 R. E. 2023, require that an objection to the Commissioner General be accompanied by relevant documents. The appellant did not attach the invoices to its objection. The respondent, through its proposal for determination (exhibit A4), specifically reminded the appellant to provide evidence. The appellant failed to file a counter-proposal under section 63 (4) of the Tax Administration Act in line with the clear statutory provisions. We entirely agree with the learned State Attorney that, to allow a party to bypass these clear statutory requirements by simply invoking rule 17 of the TRAB Rules would undermine the integrity of the tax dispute resolution framework. We, therefore find no reason to alter the findings of the Tribunal. These grounds are hereby dismissed. Reverting to the first ground, our determination is the accurate interpretation of section 7 (3) (d) of the ITA regarding PAYE and SDL. Mr. Hassan argued that the mobile telephone charges should be excluded 12 from PAYE and SDL under section 7 (3) (d) of the Income Tax Act, Cap 332 R.E. 2019 [now section 17 (3) (d) Cap 332 R.E. 2023]. That provision states: "3. In calculating an individual's gains or profits from an employment, the following shall be excluded: (d) any subsistence, travelling, entertainm ent or other allowance that represents solely the reimbursement to the recipient o f any amount expended by him wholly and exclusively in the production o f his income from his employment or services rendered . " The exclusion stipulated in the above provision is very clear as is triggered only by a reimbursement to the recipient of any amount expended by him. The word reimbursement carries a specific meaning in tax law, contemplating a two-step transaction; first, the employee incurs an expense from his own pocket; and second, the employer gives back an equivalent amount to restore the employee's funds. In the present appeal, the appellant's own financial records at page 252 of the record of appeal show that the mobile telephone benefits of TZS. 116,553,532.80 were recorded as part of emoluments paid to employees. The appellant's notice of objection at pages 48 and 88 of the record states: " the telephone charges incurred and paid by the company 13 to its employees are purely for business purposes." The appellant did not claim that the employees had first paid for the mobile charges out of their own pockets and were later reimbursed. On the contrary, the appellant admitted that it paid the charges directly to the telephone suppliers on behalf of the employees. Such payments are benefits conferred by reason of employment and fall squarely within the definition of "gains or profits from an employment" under section 7 (1) and (2) (a) of the Income Tax Act, which includes payments made to or on behalf of the individual by the employer. We subscribe to the argument by Mr. Minde that, the expenditure cannot be said to have been incurred wholly and exclusively for the production of the appellant's income. Having established the principle above, it is equally important to note the settled position that the burden of proof in tax appeals rests on the taxpayer to show that an assessment is excessive or erroneous. This position was highlighted in Insignia Limited v. Commissioner General Tanzania Revenue Authority (Civil Appeal No. 14 of 2007) [2011] TZCA 246 (30 May 2011) in which the Court quoted the excerpt from Richard A. Toby in his book titled The Theory and Practice of Income Tax (1978) wherein the learned author had this to say: - "The various authorities have settled the question that the mere making o f the assessment by the 14 Revenue is prim a facie evidence o f liability and is sufficient to demand the paym ent o f the tax. However; the onus is not one which remain on the tax-payer throughout The taxpayer need only give an explanation which appears reasonable in a ll the circumstances. This having been done, he w ill be regarded as having discharged that onus. The burden o f p roof m ust a t that point in time shift to the Revenue who m ust then satisfy the Court or Tribunal as the justification for m aintaining the assessm ent Where the Revenue fails to do so , the assessment m ust be vacated." More so, in the case of Sapna Electronics Limited v. Commissioner General Tanzania Revenue Authority (Civil Appeal No. 120 of 2022) [2025] TZCA 108 (27 February 2025) when referring to the case of Insignia Limited {supra), held: - "...the burden would only be lifted o ff the appellant's shoulders where she produces documents that show that the assessm ent was excessive or incorrect It is only then, that the respondent would be called upon to disapprove the veracity o f the documents submitted. This breeds a question as to whether that was done by the appellant ..." In the present appeal, so long as the respondent admits that the appellant incurred mobile charges as reflected in the financial statement 15 then it was the duty of the appellant to present the invoices in that respect to substantiate her claim that the expenses had been incurred wholly and exclusively in the production of income. The appellant failed to discharge this burden. While they claimed the amount was for business-related mobile charges, they could not produce the invoices to prove it, despite having multiple opportunities during the audit, objection and Board stages. The learned counsel's core argument is that the amount was undisputed because it was reflected in their financial statements. The Tribunal correctly reasoned that accepting a financial statement entry as conclusive proof would open the door to abuse and strip the respondent of its statutory duty to verify the accuracy of tax returns. The respondent was therefore entirely reasonable in questioning an amount that created a discrepancy between the payroll and the rest of the financial records. The appellant failed to prove through tendering the invoices to substantiate the fact that the expenditure was actually made to a third- party service provider, the expenditure was for mobile telephone services as opposed to another, potentially taxable, the specific employees who benefited were the ones who incurred the costs for business purposes. In those circumstances, there is no reason to fault the findings of the Tribunal that the appellant failed to meet the requirement under 16 section 18 (2) (b) of the TRAA to discharge its evidential burden hence she/it cannot benefit with the tax exclusion under section 7 (3) (d) of ITA. For these reasons, the first ground of appeal also fails. In fine, the appeal fails for lack of merit and we accordingly dismiss it with costs. DATED at DAR ES SALAAM this 21st day of May, 2026. Judgment delivered this 22n d day of May, 2026 in the presence of Mr. Nasri Hassani, learned counsel for the Appellant and Ms. Jackline Chacha, learned State Attorney for the Respondent and Ms. Janekissa Bukuku, Court clerk, is hereby certified as a true copy of the original. G. A. M. NDIKA JUSTICE OF APPEAL L. L. MASHAKA JUSTICE OF APPEAL P. J. NGWEMBE JUSTICE OF APPEAL 17