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Private Ruling From TRA

The Private Ruling issued by Tanzania Revenue Authority (TRA) against Tanganyika Law Society (TLS) on payment of Valued Added Tax on Membership Subscription Fee

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Matojo Cosatta
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184 views3 pages

Private Ruling From TRA

The Private Ruling issued by Tanzania Revenue Authority (TRA) against Tanganyika Law Society (TLS) on payment of Valued Added Tax on Membership Subscription Fee

Uploaded by

Matojo Cosatta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF or read online on Scribd
—¥ TANZANIA REVENUE AUTHORITY Ref, No, ACI639/753/01 2% December, 2024 Executive Director, ‘Tanganyika Law Society, P.O, Box 2148, malt infos or tz Dar es Salaam. Dear Sir or Madam, Re; Tanganyika Law Society Sub: ion for Private Ruling U ion 11(1) of the Tax Administration ‘Act. Cap 438 \We acknowledge the receipt of your later dated 4" September 2024 but received by this “fice on 8” September 2024, Inthe sai eter, ou introduced Tanganyica Law Society {hereinater "TLS" or the Society” interchangeably) as a body corporate that has been Citabiched under the TLS Act, Cap 307 to execute various objectives ‘hat have been ‘numbered (a) to (), of which we find no need to reproduce. itis against such backdrop TLS argues fo have been mandated to, among othe things, false snoney for al or fs objects in any manner, including but not limited to member's Subscription. That, these are statutory contributions and are not predicated upon receipt ‘St goods or services or any retum or consideration from the Society. They are therefore So consideration within the meaning and context of section 13 of the Value Added Tax Bet, Cap 148, itis on the basis ofthis understanding the Society has not applied for registration as a taxable person under the VAT Act. The Society therefore implores the Commissioner to Igeue 9 ruling n accordance with section 11(1) of Cap 438 to the effect that |. Members’ subscriptions are not taxable supplies for VAT purposes; and fi. ‘TLSieneta taxable person with respect o subscriptions hence not required to register for VAT “TLS has cited writings on international best practices to corroborate her arguments albeit \we find no need to reproduce them, Having read your arguments, we would like to bring to your attention that the law {Govercing imposition of VAT in Tanzania Manlend isthe Value Added Tax Act Cap 148, seve isthe very same law that defines the scope and Imitation of chargeabiliy of VAT. 180 9001 2015 CERTIFIED DOMESTIC REVENUE DEPARTMENT ‘Sokoine Drive, P.O. Box 1629, Dar es Salaam, Tanzania “Tel: +255-22-2113063,+255-22-21 13089,+255-22-2119464, +255:22-2122502 Fax: +255-22-2117311, +255-22-2121753 Section 6 of the said law titely provides: 6-1) Excopt as otherwise provided forin the provisions of this Actor the Schedule (2) a supply, class of supplies, import, or class of import shall not be exempt or 260 rated; anc (b} 2 person or class of persons shall not be exempted from paying value added tox Jimposed undor this Act. [Emphasis Added] It may therefore be noted that, fora particular person or a supply to be exempted from VAT, there must be an express provision under the VAT Actor its Scheie that spells such exemption, Our reading ofthe law and in particular the Schedule tothe VAT Act, shows nowhere has subscription fees payable by members of the sociely or an ‘association been exempted from VAT. \With respect to your suggestion that subscription fees are statutory contributions and are ‘not predicated upon receipt af goods o° services or any return or consideration from the Society, this argument has no leg to stand and among others, let's give a twofold reasoning Fisty, one can hardly disassociate the fruits of implementing the objectives spettin tem (@); (©) and (€) of your application from services enjoyed by members who have paid subscription fees, To argue in alternative, a member who pays such fees anticipates tenjoying services promised in the lettered objectives. It i therefore a belie of the ‘Commissioner that subscription fees are not donations to the Society where @ donor fexpects nathing in return, ‘Secondly, we have taken deliberate effort to review the Tanganyika Law Seciety (Annual ‘Subseriptons) Regulations, 2022 with considerable attention to Regublion 4. This Regulation utters clearly the consequences of not paying subscription fees, which include denying a person to practice as an advocate and not being ented to fe rights and privileges of membership. {All these suggest thet, by paying subscription fees a member not only becomes eligible for the rights and privileges entiled to members butis also given @ pass way to practice ‘8 an advocate thus Becoming better off than a person who has not pala such subscription fees, ‘The above reasoning equally negates your postulatons that subscription fees are not Consideration within the framework of section 13(1) of the VAT Actas fees are paid as Consideration for benefits stated above, Nonetheless, should your good end read section 13(2) of the VAT Act, you'd note that fees (subscription fees inclusive) have specticaly ‘been mentioned tobe includable inthe dafintion of ‘consideration Tutning to an eye of international best practices cited by your end, we are mindful that the Society's wel conversant with the principles of interoretation of statutes and literal ‘le takes primacy when the words of the statute are plainly clear tis on that spit the \VAT Act puts emphasis on invocation of such a ule ints section 6(1) whey it states that Page 20F3 pajann'et SUPPICS TLS i therefore legaly bound Ooms eae ‘subscription fees Payable by its members, faranie Ne), YOU request for a rung dictating that members ‘subscriptions are not fet boon Society i not a taxable person henca nolo ede registered have paragrapnes ented by te Commissioner Conversely as cameos ea Preceding pe _dlatwithstencing the foregoing, It should be noted that VAT eiigibity shoul inchanessed holistically, considering all sources er neers, ‘rather than analyzing mepsdut! tems in isolation. In this regard, while we tone already clarified that Please be guided accordingly. “Together We Bulld Our Nation” Copy to: Regional Manager - lala Tax Region Page 30f3

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