Plea Bargaining in Tanzania

Plea bargaining refers to the process whereby an accused and public prosecutor reach a mutual agreement without going through long court proceedings. In this process, the accused voluntarily admits charges and the prosecution voluntarily discharges some charges or asks the court to reduce punishment to the accused upon conviction. This is very common practice in many developed countries including but not limited to United State of America, Italy, France etc.

Types of plea bargaining

Plea bargaining is not a collective and cumulative scheme, it is based on needs and demands of both sides, that is to say, a prosecution and accused. These parties may bargain on the following terms: –

  • Charges bargaining
  • Sentence Bargaining
  • Facts bargaining
  • Counts bargaining

In Tanzania, the term plea bargaining is not very common because our Criminal Procedure Act is silent on this. Our criminal justice framework does not provide a leeway for an accused person to voluntarily bargain with prosecution to dispose his case without going through the long and complex court proceedings. Nevertheless, a number of major criminal cases since 2017 to date have been disposed through informal plea bargaining. This is most commonly in economic crimes cases where the accused persons voluntarily admit offences and the prosecution side either substitutes or withdraw some of offences. A large number of economic crimes cases seem to have ended this way. This is typically a plea-bargaining scheme although it has not clearly been prescribed by the law.

Why plea bargaining is necessary at this particular time?

We should admit that, this is one of the very strict regime ever happened in our land save for Mwalimu Nyerere time where economic sabotage offences were at its apex. This regime is very strict and sensitive when it comes to compliance issues. It is undisputed fact that, the compliance offences are the leading chargeable offences in this era, these includes Money Laundering, Tax Evasion, Economic Organized Crime and Occasioning Loss.

It should be made clear that, most of the aforementioned offences do not need ill motives to be charged with. Most of the persons charged, either abstained from fulfilling their obligations or negligence. For example, money laundering and occasioning loss offences mostly arise from negligence.

Therefore, to that end, it is important to have a clear and well recognized legal framework which will allow these people who have been in trouble for negligence and without ill will, to settle with the prosecution without going through tough, complex and long court proceedings.

Advantages of plea bargaining. Plea bargaining has a number of advantages, these includes: –

  • Expeditious disposal of many criminal cases;
  • It guarantees win to the prosecution side;
  • Leniency;
  • Aid other cases;
  • Normally no maximum sentence is imposed;
  • It reduces the inmate congestion in prison facilities; as well as,
  • It saves time and of course it is the source of government revenue.

Disadvantages of plea Bargaining

  • Creation of criminal record for the innocent, because some people decide to plea despite the fact that they are innocent for the fear of long and complex trial;
  • Some people argue that it is unconstitutional as it does not guarantee fair and effective trial; and,
  • Eliminates a chance for appeal.

Our recommendations

It is the right time to amend our Criminal Procedure Act, 1985 by inserting the provision which allows a plea bargaining. Also, it is the convenient time to have the Plea-Bargaining Rules to legally justify the current informal plea bargaining.

However, for it to be effective, most of our Penal laws have to be amended in sentencing provision to include an option of fine to some offenses which are economical. For example, section 13 of Written Laws (Miscellaneous Amendment Act No.3 of 2016 amended section 60(2) of Economic Organized Crime Cap 200 to impose a compulsory imprisonment of 20 to 30 years while the main offences like Money laundering may be punished with fines in their respective laws.

Therefore, for the effective and efficient plea-bargaining scheme, all the harsh punishments such as compulsory imprisonment without fine option should be eliminated. This is because an accused person may hesitate to plea for the fear that they will be sentenced to prison.

Withholding Tax is due on Actual Payment!

The Tax Revenue Appeals Board (TRAB) has on 15th October 2021 ruled in Tax Appeal No. 50 of 2018 between Vodacom Tanzania Public Limited Company and Commissioner General, Tanzania Revenue Authority, that: 

The Board rules that Withholding Tax is due on Actual Payment!

The Tax Revenue Appeals Board (TRAB) has on 15th October 2021 ruled in Tax Appeal No. 50 of 2018 between Vodacom Tanzania Public Limited Company and Commissioner General, Tanzania Revenue Authority, that: –

  • Withholding tax is due and payable on actual payment and not on accrual;
  • TRA wrongly applied section 3 and 23 of the ITA, 2004 in disregard of section 82 of the ITA 2004;
  • It is a cardinal principle of law that a specific provision prevails over a general provision;
  • Section 82 of the ITA 2004 being a specific provision, places the withholding obligation when a taxpayer pays the payments in question;
  • Definition of the word “payment” in section 3 of the ITA 2004 must be read subject to the context provided in section 82 of the ITA 2004; and
  • TRA’s imposition of interest for late payment was incorrect.

Background of the case

If there is an issue that has been tormenting the minds of taxpayers, Chief Finance Officers, Tax Managers and Tax Consultants as well as practitioners over the past decade, is the question as to: “at what point in time, the withholding obligation arises, whether when interest is paid or when it is accrued?” This question was yet to achieve judicial scrutiny in the United Republic of Tanzania until Vodacom took the issue to judicial bodies. Briefly, the appeal before the TRAB emanated from TRA’s determination of the Appellant’s Notice of Objection against Withholding Tax on Interest on Shareholders’ Loans. TRA served upon the Appellant, the Notice of Confirmation of Assessment confirming its position that withholding tax on interest on shareholders’ loans is due and payable to the Authority on accrual. The Appellant had been accounting for withholding tax when actual interest payments were made to the lenders. TRA viewed the Appellant’s practice as incorrect and consequently assessed the Appellant with interest for late payment of withholding tax on interest on shareholders’ loans. Aggrieved by TRA’s decision, the Appellant preferred an appeal to the TRAB.

Issues for Determination

When the appeal was called for hearing, the Board adopted and recorded the below issues: 

  • Whether withholding tax is due on interest when the interest is paid or when it accrues;
  • Whether the imposition of interest on late payment is correct at law; and
  • What remedies are available to the parties?

The TRAB’s Reasoning & Decision

The TRAB has held that, withholding tax on interest is due when such interest is paid and not when it accrues. The question revolved around interpretation. The TRAB concurred with the Appellant that the definition of “payment” under section 3 of the ITA 2004 is applicable unless the context requires otherwise. In the present case, the context in section 82 (1) requires that, withholding tax be charged when interest is paid. The TRAB further observed that it is a cardinal principle of law that, a specific provision overrides a general provision. Hence, TRA misconceived the interpretation of section 3 (the word payment) and section 23 of the ITA 2004, which are general provisions and section 82 of the ITA 2004 which is a specific provision. After answering the question when withholding tax on interest is paid, the TRAB held further that TRA was wrong to impose interest for late payment, and consequently proceeded to allow the Appellant’s appeal on its entirety.

Our View

This principle is well established and cannot be easily departed from; second, the TRAB’s application of strict interpretation of taxing statutes, which again, is a well celebrated principle of taxation. That taxing statutes must be construed strictly is the foundation of taxation since its inception. It would be hazardous to accord a liberal interpretation of taxing statutes as by so doing, the canons of taxation, such as certainty, predictability and fairness cannot be achieved. 

To taxpayers, the decision is a huge relief it states the legal position that address a very burning issue on the incidence of withholding tax in Tanzania.

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