THE Court of Appeal has dismissed with costs the appeal challenging payments of over 4bn/- tax to the Tanzania Revenue Authority (TRA) that had been lodged by a local company that manages the affairs of the School of St Jude School.


A panel led by Chief Justice Ibrahim Juma and Justices Augustine Mwarija and Richard Mziray ruled against the academic institution after holding that all grounds of appeal presented to fault the findings of the Tax Revenue Appeals Board and that of the Tax Revenue Appeals Tribunal lacked merits.

In the appeal, the main contention was that the appellant company was; not carrying out its business derive profit and was; a company limited registered by guarantee; not having a share capital and provides free education; to 96 per cent of the enrolled students through donations and sponsorships.

However, the justices of the appeals court agreed with the tribunal’s findings; that free education provided by the appellant was; paid by third parties and so the surplus shown in his bank statement was; a profit derived from business.


“The same is therefore chargeable to tax. In the final analysis, we do not find merit in the appeal. The same is hereby dismissed with costs,” they declared in their judgment delivered in Dodoma recently.

Facts leading to the appeal show that on August 23, 2012, the Commissioner General of TRA, as respondent, issued to the appellant two notices for income tax assessment 1,991,672,238/90 and 2,251,655,919/90 derived from surplus of expenditure for years 2009 and 2010, respectively.

The appellant objected to the assessment through two letters on the grounds that the company was not doing business or conducting either investment or employment and did not therefore have any income chargeable to tax.

In his response to the appellant’s letters, however, the respondent maintained that the appellant was doing business and, therefore, liable to the assessed tax. The appellant was further dissatisfied and on August 28, 2012 applied for the Commissioner’s ruling under Section 131 of the Income Tax.

The appellant claimed that his was a charitable organisation. In its ruling dated February 8, 2013, the respondent refused to give the sought ruling; and that the appellant had not met the requirements of Section 64 (8) of the Act so as to be; recognised as a charitable organisation for income tax purposes.

Having being dissatisfied by the decision; the appellant rushed to the Appeals Board for declaratory orders that; the notices of confirmation of assessments were; null and void on grounds that the respondent was; wrong in assessing him to pay corporate tax while he was not doing business.

The appeal was; resisted by the respondent, who maintained that the appellant was; doing business and therefore liable to pay the assessed tax. After hearing the appeal, the Board dismissed the same after holding that the appellant was not a charitable organisation.

The Board further held that since the appellant was earning school fees and because it was also generating surplus, he was not a nonprofit making organisation and thus liable to pay tax assessed. After dismissing the appeal, the appellant decided to cross over to the Court of Appeal.