Here’s a hearty welcome to this preparatory article of my new “Tanzania in International Tax Law” column in The Citizen, huge and warm enough to encompass you, dear reader! I made up my mind that I would first inform my potential Tanzanian and overseas readers from Canada, China, India, Kenya, South Africa, Uganda, the United Kingdom, and other countries about my decision to write this column which addresses current issues in international taxation from the standpoint of Tanzania—a vibrant and beautiful East African nation that is situated just south of the Equator with vast untapped investment potentials.
My colleague, Lilian Kyaruzi, a Tanzanian-educated lawyer and advocate of the High Court of Tanzania and legal director in Isidora & Company, takes over from me the adjacent weekly law column, including the ongoing 11-part article series on Tanzania government contracting. It is really exciting to start something new; that is to say, explore and exchange views and opinions about different ideas, developments or judicial decisions relating to Tanzania’s tax laws from both an international and a local dimension.
It would be nice for civil society, business, government policymakers, tax administrators, and international organizations to know what a tax and corporate lawyer, consultant, analyst and columnist ruminates on, for example, Tanzania’s changing transfer pricing landscape, resolution of disputes and the challenges posed by the deficiency of comparable data, but it would be head and shoulders above that to know what a chief executive officer, chief finance officer, tax manager, an in-house legal counsel, academic, a member of parliament, and a policymaker thinks about the transfer pricing landscape.
Transfer pricing is one of the key challenges in international taxation. The African Tax Administration Forum (ATAF), of which Tanzania is a member, has identified transfer pricing as a core tax issue in the African region in light of the huge growth in global trade and the launch of the operational phase of the Agreement Establishing the African Continental Free Trade Agreement (AfCFTA). The pact, which Tanzania has already signed but is yet to ratify, entered into force on 30 May 2019 for the 24 countries that had deposited their instruments of ratification.
Tanzania, like other countries in Africa, is struggling to build audit capacity to squarely deal with this issue and implement or strengthen its new Tax Administration (Transfer Pricing) Regulations, 2018—that replaced the previous Regulations issued in 2014. Have the new Regulations aligned with the international best practices such as the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, which provide guidance on the application of the “arm’s length principle”?
I will be sharing my thoughts on this and other issues, including, but not limited to, taxing digital businesses in Tanzania; negotiating double taxation agreements and bilateral and multilateral investment treaties; taxing the rich; interaction between Tanzanian treaty law and Tanzanian domestic law, taxing profits of foreign entities in Tanzania; taxing employees in international organizations; how the East African Community (EAC) has shaped Tanzanian tax law; and other topics in this weekly column and I invite everyone to respond.
I will be discussing about tax policy and multinational tax planning and also bantering about other tax issues which raise difficult tax policy issues that Tanzania has attempted to address through its domestic tax law and to which there are currently no answers, or to which there are so many various ways to answer the issues. Needless to say, a good tax system generates the revenues needed to finance government spending in a simple, equitable, and growth-friendly manner.
My background in business and corporate law and practice will really come in handy when I start writing articles in the “Tanzania in International Tax Law” column, and I appreciate the fact that I have experience writing a column in The Citizen.
This particular column will be an essential reading for all readers wishing to acquire a working knowledge of Tanzanian tax issues in international cross-border business, trade and investment. The first article in the column will be authored and published on Saturday, 28 September 2019. I hope that you will read and react to the contributions. One of the things I learnt from my lecturers, Dr. Erasmo Nyika and Dr. Boniphace Luhende, both of the School of Law at the University of Dar es Salaam, during the 2018/19 Master of Laws in Taxation program, is that the same tax issue can be seen from many different perspectives, depending on which angle of the issue you are exploring in order to clearly define it.
I wish all my readers a rewarding experience. ‘See’ you soon!