Tanzania vs Total Tanzania Limited, April 2026, Court of Appeal, Case No Civil Appeal No 425 of 2023
Table of Contents
Case Information
Court: Court of Appeal of Tanzania at Dodoma
Case number: Civil Appeal No. 425 of 2023
Citation: Total Tanzania Limited v Commissioner General (TRA), Civil Appeal No. 425 of 2023, Court of Appeal of Tanzania
Applicant: Total Tanzania Limited
Respondent: Commissioner General (TRA)
Jurisdiction: Tanzania
Judgment date: 9th April, 2026
Judgment Summary
Total Tanzania Limited appealed to the Court of Appeal against the decision of the Tax Revenue Appeals Tribunal, which had upheld the Tax Revenue Appeals Board's disallowance of deductions claimed by the appellant for technical assistance fees paid to Total Outre Mer for the years 2011, 2013 and 2014.
The Court of Appeal did not reach the substantive transfer pricing and deductibility questions. Instead, it disposed of the appeal on the third ground, finding that the Board's judgment was fatally defective because the Vice Chairman had failed to comply with the mandatory requirement under rule 15(3) of the Tax Revenue Appeals Board Rules, 2018 to record reasons for disagreeing with a dissenting Board member.
The Court quashed both the Board's judgment and the Tribunal's judgment, set aside all resultant orders, and remitted the matter to the Board to compose a new judgment in accordance with the law.
Background
Total Tanzania Limited is a limited liability company incorporated in the United Republic of Tanzania, carrying on the business of marketing and distribution of fuel and lubricants in the country.
The Commissioner General of the Tanzania Revenue Authority disallowed deductions claimed by the appellant in respect of amounts said to have been incurred as expenses in the production of its income under section 11 of the Income Tax Act, 2004 for the years 2011, 2013 and 2014. The disallowed amounts related to fees charged to the appellant by Total Outre Mer, described as group technical assistance fees.
The appellant appealed to the Tax Revenue Appeals Board in Consolidated Income Tax Appeals Nos. 394, 395 and 396. The Board, in its decision dated 28 May 2021, upheld the disallowance. The Board found that the appellant had failed to establish through evidence that the amounts were incurred for the payment of technical services rendered by Total Outre Mer under section 11(2) of the Income Tax Act, 2004, and therefore the amounts did not qualify as deductible under section 33 of that Act. The Board further found that the existence of transfer pricing documents showing the transaction was at arm's length was not in itself sufficient proof that services were rendered.
Within the Board, one member, Ms. Misso, held the view that production of the transfer pricing document sufficed to prove provision of services. The Vice Chairman and the other Board member disagreed. The decision was made by majority. The Vice Chairman did not record reasons for disagreeing with Ms. Misso's opinion.
The appellant then appealed to the Tax Revenue Appeals Tribunal in Tax Appeal No. 09 of 2023. The Tribunal, in a judgment dated 15 February 2023, upheld the Board's decision. The appellant then brought the present appeal to the Court of Appeal.
Core Dispute
The substantive dispute concerned whether the group technical assistance fees charged to the appellant by Total Outre Mer were deductible as expenses incurred in the production of income under sections 11(2) and 33 of the Income Tax Act, 2004, and whether transfer pricing documentation demonstrating an arm's length transaction was sufficient, on its own, to prove that services had actually been rendered.
A procedural dispute also arose as to whether the Board's judgment was fatally defective because the Vice Chairman failed to record reasons for disagreeing with the dissenting opinion of Board member Ms. Misso, as required by rule 15(3) of the Tax Revenue Appeals Board Rules, 2018, read together with section 20 of the Tax Revenue Appeals Act, Cap. 408.
Court Findings
The Court addressed the third ground of appeal first, concerning procedural compliance by the Board.
The Court confirmed that a point of law may be raised for the first time on appeal, even if not raised before the Tribunal, relying on authority including Halid Maulid and Another v Republic (Criminal Appeal No. 342 of 2020) [2021] TZCA 225.
The Court held that rule 15(3) of the Tax Revenue Appeals Board Rules, 2018 imposes a mandatory obligation on the Chairman or Vice Chairman of the Board to record the opinion of any dissenting member and to give reasons for disagreeing with that opinion. The Court noted that section 20 of Cap. 408 applies the same obligation to the Tribunal.
The Court rejected the respondent's argument that the omission was inconsequential because only one of the two members dissented. The Court held that the obligation to give reasons applies regardless of whether one or both members hold a differing opinion, as is clear from the phrase "a member or members" in rule 15(3).
The Court applied what it called the Segeseie principle, derived from Charles Segeseie v Republic, EACA Criminal Appeal No. 13 of 1973, as adopted in Abdallah Bazamiye and Another v Republic [1990] T.L.R. 42. That principle requires a decision-maker who disagrees with assessors or members to record reasons, so that an appellate court can determine whether the disagreement was justified. The Court held the principle applies in any proceeding conducted with the aid of assessors or members where the law requires reasons to be given for disagreement.
The Court found that the Vice Chairman's failure to record reasons for disagreeing with Ms. Misso's opinion rendered the Board's judgment fatally defective. Because this finding was sufficient to dispose of the appeal, the Court did not consider the first and second grounds of appeal concerning the substantive deductibility and transfer pricing questions.
Outcome
The Court of Appeal allowed the appeal. It quashed the judgment of the Tax Revenue Appeals Board and set aside the resultant orders. As a consequence, the judgment of the Tax Revenue Appeals Tribunal and the orders arising from it were also quashed and set aside. The record was remitted to the Tax Revenue Appeals Board for it to compose a new judgment in accordance with the law. No mention of a costs order appears in the judgment.
Major Issues / Areas of Contention
- Whether the Vice Chairman of the Tax Revenue Appeals Board was required, under rule 15(3) of the Tax Revenue Appeals Board Rules, 2018, to record reasons for disagreeing with a dissenting Board member's opinion, and whether failure to do so rendered the Board's judgment fatally defective.
- Whether a new ground of law, not raised before the Tribunal, could be raised for the first time before the Court of Appeal.
- Whether the existence of transfer pricing documentation showing a transaction was at arm's length was, on its own, sufficient proof that technical services had actually been rendered by Total Outre Mer to the appellant, for the purposes of deductibility under sections 11(2) and 33 of the Income Tax Act, 2004 (this issue was not decided, as the court disposed of the appeal on the procedural ground).
- Whether group technical assistance fees charged by Total Outre Mer to the appellant qualified as deductible expenses incurred in the production of income under section 11(2) of the Income Tax Act, 2004 (this issue was not decided, as the court disposed of the appeal on the procedural ground).