After traders’ strike, envoys call for dialogue, citing unfair tax practices towards investors and arbitrary freezing of bank accounts in Tanzania

Following a four-day traders’ strike from June 24 to 27, 2024, extending to nine regions, with the main complaints surrounding the tax system, several envoys also requested a dialogue with the Ministry of Foreign Affairs, the Minister of Finance, the Minister of Investment and Planning, the Minister of Industry and Trade and the Commissioner General of the TRA to discuss the challenges facing investors.

“Many of our investors are facing significant disruption due to unsubstantiated notices from the TRA demanding payments and account reconciliations dating back 15 years. Many businesses have experienced “bank branch notices” that freeze accounts, interrupt operations and negatively impact employees salaries and cash flow from suppliers,” reads part of the letter seen by The Chanzo.

The envoys also claim that the TRA has refused to recognize tax relief agreements that investors have entered into with the Tanzania Investment Center and ministries, saying these agreements are not gazetted. The letter also shows that TRA officials use threats to pressure investors into complying with its demand.

The letter explains: “Investors also report that TRA agents levy extraordinary taxes not supported by Tanzanian law, threaten Tanzanian investors and partners when companies protest or appeal these practices, and freeze or seize bank accounts and company assets without timely notification or legal recourse. »

The letter is signed by ten envoys, including Michael A. Battle Sr., Ambassador of the United States of America to Tanzania; David Concar, British High Commissioner; Wiebe de Boer, ambassador of the Kingdom of the Netherlands; Mags Gaynor, charge d’affaires and deputy ambassador of Ireland; Nabil Hajlaoui, French ambassador; Peter Huyghebaert, Belgian ambassador to Tanzania; Kyle Nunas, High Commissioner of Canada; Seungyun Lee, charge d’affaires and deputy ambassador of Korea; Charlotta Ozaki Macias, Ambassador of Sweden and Thomas Terstegen, Ambassador of the Federal Republic of Germany.

It is worth noting that most of the items listed in the letter are similar to those complained about by traders. One of the issues raised by traders is the TRA’s practice of issuing agency notices and taking money from traders’ bank accounts.

This practice was widespread during the fifth phase of government under Magufuli, but when President Samia came to power, she pledged to reform the business environment and many stakeholders reported positive developments in the business environment. environment. Recent complaints from traders and investors could indicate that old challenges are resurfacing in the business environment.

In the new budget for the financial year 2024/25, the government has committed to ensuring a conducive business environment for investors and other businesses

In response to the letter, the Foreign Minister agreed to establish a dialogue between the envoy and other parties and also welcome investors who are facing difficulties.