causes of inadequate use of ADR in tax dispute settlement
Transcript of causes of inadequate use of ADR in tax dispute settlement
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
1/42
CERTIFICATION
The undersigned certifies that he has read and hereby recommends, for the acceptance of the
Institute of Finance Management research entitled Causes for inadequate use of
Alternative Dispute Resolution in Tax Dispute Settlement, a case study of Tax Revenue
Appeals tribunal, in partial fulfillment of the requirements for the award of Postgraduate
Diploma in Tax Management (PGDTM).
.......................................................................................
Zawadi, O.
(SUPERVISOR)
Date...............................................................................
i
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
2/42
DECLARATION
I, Sabiha Abdi Nassib, hereby declare that this research is my own original work, and that it
has not been submitted to any other university/institute for a similar or any other degree
award.
Signature
..
Date
ii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
3/42
Copyright by Sabiha Abdi Nassib
All rights reserved
2011
iii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
4/42
DEDICATION
I dedicate this work to my dearest son, Abdulrahim Kirondomara for and to My
Lovely Husband for.
iv
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
5/42
ACKNOWLEDMENT
First and foremost I would like to thank the Merciful Allah who gives me power and health
all the time for the whole period of my studies.
Many people in one way or another, directly or indirectly, contributed in accomplishment of
this research paper .Iam grateful to take this opportunity to acknowledge them.
I sincerely thank Mr. Mujuberi, my supervisor for his tireless guidance on critical issues
concerning this study.
Also ,I would like to express my deeper gratitude to the member of my family especially my
beloved husband Mr. Soud H.Soud, my mother Mrs.Mwanjabu M.Omar,all my sisters and
my brothers for looking after my children .Without their support it would be very difficult to
reach where I am now.
I am also greatly indebted to the management of Ministry of Education, Officers, teachers
and all of my respondents. I appreciate the cooperation offered to me. Without them my work
could go astray.
Special thanks to my sister Sabiha Nassib ,who accorded me with all the support and
conducive environment during my study .She has been very helpful and I appreciate what
she has done for me , so I take this opportunity to say a warm thank you
v
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
6/42
Finally ,I would like to appreciate all my lectures and my classmates of MPA (Human
Resource Management) in 2007/2009 ,for being cooperative to me during our study which
has enabled accomplishment of my study.
vi
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
7/42
LIST OF ABBREVIATIONS
TRAA - Tax Revenue Appeals Act
TRAT - Tax Revenue Appeals Tribunal
TRAB - Tax Revenue Appeals Board
R.E - Revised Edition
TRA - Tanzania Revenue Authority
ADR - Alternative Dispute Resolution
vii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
8/42
LIST OF TABLES
TABLE PAGE
Table 1: Sampling procedure 22
Table 2: Age of respondents 30
Table 3: Gender of respondents 30
Table 4: Age of respondents 35
Table 5: Education level 35
Table 6: Subject respondents used to teach 36
viii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
9/42
LIST OF FIGURES
Figure Page
Figure 1: Tax Appeal resolution machinery and its hierarchy 28
Figure 2: Education level 31
Figure 3: The level of satisfaction 32
Figure 4: Intention to leave the job 33
Figure 5: Gender of respondents 34
Figure 6: Lengths in Teaching 37
ix
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
10/42
LIST OF STATUTES
x
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
11/42
LIST OS CASES
xi
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
12/42
APPENDICES
Appendix 1: Area of the study 55
Appendix 2: Questionnaire 1 56
Appendix 3: Questionnaire 2 58
Appendix 4: Questionnaire Swahili version 60
Appendix 5: Questionnaire Swahili version 62
xii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
13/42
ABSTRACT
The study intended to examine the factors contributing to teachers turnover from
Government Secondary Schools; the Urban West Region in Zanzibar was the focus of this
study.
Specifically the study was expecting to identify the factors that contributing teachers change
their jobs or to leave government schools and employed in private schools. Another objective
is to propose possible measures to the top management of Ministry of Education in dealing
with the high rate of teachers turnover.
The data for this study were collected from documents, standardized questionnaires,
interviews and informal discussions. Both statistical and descriptive methods of data analysis
were used.
From this study the researcher found that job dissatisfaction was the major reason teachers to
leave government schools and turn either to private schools or to other institutions. Other
reasons includes poor working condition, low salary, lack of motivation as well as poor
relationship between teachers and their supervisors.
xiii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
14/42
DEFINITION OF THE KEY CONCEPT USED
One main concept has been used in this study and the researcher sees the need of
defining it;
Alternative Dispute Resolution (ADR, sometimes also called Appropriate Dispute
Resolution or External Dispute Resolution in some countries, such as Australia) is a
general term, used to define a set of approaches and techniques aimed at resolving
disputes in a non-confrontational way (i.e. includes dispute resolution processes and
techniques that fall outside of the government judicial process).
ADR covers a broad spectrum of approaches, from party-to-party engagement in
negotiations as the most direct way to reach a mutually accepted resolution, to
arbitration and adjudication at the other end, where an external party imposes a solution
(Yona Shamir, 2003).
The ADR movement started in the United States in the 1970s in response to the need
to find more efficient and effective alternatives to litigation.
Recently, ADR has become institutionalized as part of many court systems and system
for justice as a whole throughout the world.
There are four common types of ADR, that are;
(i) Mediation
(ii) Arbitration
(iii) Conciliation
(iv) Adjudication
xiv
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
15/42
TABLE OF CONTENTS
LIST OF ABBREVIATIONS.............................................................VII
RESEARCH METHODOLOGY..........................................................11
3 INTRODUCTION.......................................................................11
xv
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
16/42
xvi
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
17/42
xvii
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
18/42
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE PROBLEM
Dispute between tax authorities and tax payers are inescapable. This is irrespective of
how well a tax system is developed. The mechanisms for resolving tax disputes are
very critical in ensuring that tax administration is not only efficient but also respectable
and fosters public trust (Luoga, 2009).
In ensuring so, the Government introduced unified Tax Appeal machinery under which
tax disputes arising from all Revenue Laws administered by Tanzania Revenue
Authority (TRA) have to be lodged in the same appellant authority. The Act of
Parliament, Tax Revenue Appeals Act, Cap 408 Revised Edition of 2006 under Section
4 and Section 8 establishes the Tax Revenue Appeals Board (TRAB) and Tax Revenue
Appeal Tribunal (TRAT) respectively.
One among the powers vested to TRAT under Section 17(1) of TRAA, Cap 408 R.E of
2006 is to resolve complaint or appeal by using mediation, conciliation or arbitration,
that is to say the Tribunal is powered to use Alternative Dispute Resolution (ADR) in
its dispute settlement. The section reads as follows;
17(1) The Board and the Tribunal shall respectively have the power
(a)
(b) To resolve any complaint or appeal by mediation, conciliation or
arbitration
Many researches has examined the importance and usefulness of using ADR especially
mediation in disputes settlement. According to (Merricks, 2007) conciliation,
mediation, arbitration and adjudication are now commonly encounted in such diverse
field as family break down, construction disputes, shipping and insurance and travel
agency complaints. Merrick is of the view that ADR is the umbrella term for services
that provide for the opportunity of resolving disputes without going to Court.
1
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
19/42
He concluded by saying that, the Financial Ombudsman Service has developed a very
different model from that of the Civil Courts and is the preferred alternative for most
retail Consumers of Financial Service. The comparison in style, process, institutional
systems and legal approach may offer observers fund for thought about potential
development in the Civil Courts themselves.
The current resolution procedures which involve heavy emphasis on the Courts do not
provide an efficient system to meet the needs of contemporary industrial relation
(Singh, 1995).
Despite of the fact that TRAT is powered to use ADR, and many studies have been
conducted regarding the importance and usage of ADR, the records shows that only
1.2% of the cases determined by TRAT have used ADR and the cases were marked
settled between the parties.
From that history, is where the researchers interest arose in exploring the causes that
lead to inadequate use of ADR in Tax dispute settlement.
1.2 STATEMENT OF THE PROBLEM
The usage of ADR in dispute settlement is now common and used in almost every
corner in the world.
The intension of this research is to deal with the properly and adequate use of the ADR.
ADR can be used effectively if the parties to the particular case have interest in that
case, the nature of the case is allow it and the judge has a knowledge of ADR process.
Many findings from the studies reveals that the usage of ADR is very effective in cost
savings (Broker, 2009) immediate resolution (of the dispute), building the good ending
relationship between the parties and openness and transparency (as the parties get to
know the position of the case and predict the out come and when the decision
concluded it is known to both parties and do not come as a surprise as it appears in
normal Civil Courts) (Merricks, 2007).
2
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
20/42
Moreover, (Ilter & Dikbas, 2009) have found out that most of parties agreed to the
need for moving away from adversarial methods of dispute resolution. This is because;
ADR is short and low costs process, the fear of bad reputation in the sector during it
litigation, trying to avoid the deterioration of the close relationships they have with
other parties, trying to avoid the work hours spent for the preparation of litigation or
arbitration, and the fear of losing in litigation due to the tendentious contrasts.
The mediation procedure has found favour with many litigants in several jurisdictions
and helped to restore the faith of the general public in the judicial system. In one
jurisdiction over 40% of the over 2,500 cases disposed of in one year were mediated
settlements (mapigano,J. 1998).
Regardless of that analysis, TRAT still uses common known way of dispute resolution
under civil proceedings in most of cases.
Therefore this study helped in finding the factor that causes the inadequate use of the
alternative dispute resolutions in tax dispute settlement and provide recommendations
that will help to improve the usage hence eliminate the problem.
1.3 OBJECTIVE OF THE STUDY
1.3.1 GENERAL OBJECTIVE
The general objective of the study is to find out the cause for inadequate use of ADR in
tax dispute settlement.
1.3.2 SPECIFIC OBJECTIVES
The specific objectives of this study are:-
i. To identify the causes of inadequate use of ADR in the Tax Revenue Appeals
Tribunal.
ii. To identify whether there is a need of using ADR in dispute resolution
3
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
21/42
iii. To suggest the measures to be taken by TRAT in dealing with the identified
problem
1.4 RESEARCH QUESTIONS
This study will answer the following questions;
i. What factors influence inadequate use of ADR in Tax Revenue Appeals
Tribunal?
ii. Why the ADR has to be used in dispute resolution?
iii. What measures to be taken to improve the usage of ADR?
1.5 SIGNIFICANCE OF THE STUDY
The findings of the study will explore the important element for the usage of ADR, by
doing so it will help the respective bodies to implement ADR as it is required by the
law. Also it will introduce the weakness of the ADR and it will give the parties a wider
room for choosing the usage of the system.
By knowing the importance of ADR this study will also explore for the need of using
ADR in dispute settlement.
Lastly, the study is expected to enhance TRAT (i.e. members and parties to the dispute)
to use the ADR so that it can exercises its powers effectively.
1.6 SCOPE OF THE STUDY
The study will cover the in depth on the usage of ADR at Tax Revenue Appeals
Tribunal and it will be conducted in Dar es Salaam. This is because headquarter of the
case is situated in Dar es Salaam and that is where the researcher will find all expected
respondents.
4
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
22/42
The study data will be referred to eight (8) years. This is because TRAT has officially
stated its work from 2002.
1.7 CHAPTER SCHEME
The study consists of six chapters.
Chapter one comprises the background of the study, statement of the problem, objectives
of the study, research questions, significance, scope and chapter scheme of the Study.
Chapter two present literatures review which look at the previous study concerning the
problem
Chapter three focuses on research methodology.
Chapter four provide an overview of the Tax Revenue Appeals Tribunal (TRAT), its
dispute resolution mechanism, cases decided and evaluation of the method used in
deciding those cases.
Chapter five presents analyses of the research findings.
Chapter six presents summary of the findings, conclusion and recommendation of the
study
5
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
23/42
CHAPTER TWO
LITERATURE REVIEW
2.1 CONCEPT OF ADR AND THEORETICAL LITERATURE REVIEW
As is appears that disputes are an integral part of human interaction, we must learn to
manage them, to deal with them in a way that will prevent escalation and destruction
and come up with innovative and creative ideas to resolve them.
(Benner, 1995) reveals that, for some time now we have conflict and it often occurs
when people of different cultures, personalities, expectation sets, etc interact together.
He said that conflict is seen as given and our best expectation is to be able to
resolve it or reduce is through the use of strategies, for examples consensual
approaches and third party intervention. He add that, no one will dare to suggest that
there assumption, in fact, creates a context for conflict, and all attempts to deal with it
rise from this basic assumption. People discuss strategies for resolving conflict,
hopefully in a win-win manner, but no one dares to suggest that conflict would be
transcended.
Researchers have found that there is a need to initiate special programmes for conflict
resolution and mediation. They believe that as learned to cope with conflict and to live
and work more harmoniously with each other we would gain an increased sense of
control over our own life and the confidence to assume responsibility for the common
good. The programmed was designed to facilitate a climate of collaborative learning
and problem solving. The intent was to orient people, connect them with each other,
and teach them to internalize and apply conflict resolution skills. (Gahr, Mosca, Sarsar,
1995).
(Mbunda, 1985) writes on dispute settlement prior and after independence. He
comments on the efforts of the government to have informal procedures of settling
disputes in Primary Courts. He argued that the procedures used are not familiar to many
litigants, as they do not resemble customary dispute settlement procedures. He contends
further that the dominant civil procedure law, which is an adversarial system of dispute
settlement, presupposes that the litigants are literate, have enough legal knowledge and
6
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
24/42
know all the technicalities of the law. He further cautions that the situation in Tanzania
does not allow the application of such rules without causing injustices. His work is not
based on ADR, but it is relevant to this study in the sense that it narrates the historical
aspects of disputes resolution mechanisms in Tanzania.
Otaru in her paperAlternative disputes Resolution mechanism in Tanzania 2003,
discusses the development of ADR in Tanzania. The author also tries to contrast ADR
and pre-colonial or traditional disputes mechanism and opines that ADR in Tanzania
can perform better by reintroducing those traditional methods of dispute settlement, her
main argument being that in most cases even when settlement is reached under ADR is
not for full satisfaction of both parties unlike in traditional disputes settlement
mechanism, as the former will have already incurred cost prior going into process of
mediation. She contends further that in practice some agreements in form of settlement
are not fulfilled by the very parties, thus bringing them to a litigation process in trying
to enforce them. The author does not assess other factors such as the problem of dual
function of court, the importance and advantages of using ADR and the important
factors to be considered before using ADR adequately which are discussed in this
study.
(Mapigano, J, 1998) comments that ADR is a solution to inherent problems and flaws
of litigation created by adversarial model of dispute resolution, which is very
expensive, long and too complicated for many litigants and favours the rich and
educated. He further documents the reason for adoption of mediation in Tanzania and
the conduct of the mediation process. The manual is intended to be used as a guideline
for mediators. It also provides a guide to researchers on historical aspects of ADR in
Tanzania.
According to Chipeta, ADR is generally understood in most cases to mean mediation.This is due to the fact that ADR in Tanzania is so far has taken a form of mediation and
is forming part and parcel of civil procedure law. This kind of definition in some cases
in practice has not been extended to cover instances such as settlement of dispute
mechanism. Therefore, ADR in Tanzania forms part and parcel of civil procedure law
and is mandatory annexed to the court system (Gillah, 2006)
7
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
25/42
For a tax system to be efficiency, among other elements, it must have a manageable
dispute mechanism. There must be special and independent institutions that hold
hearing and solve disputes regarding tax issues, and tax payers to have the right to
appeal against the assessment during first five years from the assessment date.
(Vlaseenko 2001).
2.2 EMPERICAL LITERATURE REVIEW
There are several researches on the use ADR in dispute settlement, which have been
conducted by different sources.
The analysis reveals that nature of case, interest of parties and skill and knowledge of
Mediator (Judge) and merit of the case are positively related to the use of ADR.
1.7.1.1 Interest Of The Parties
According to (Brooker, 2009) the findings of the mediation of the USA study show that
the critical factor for non-settlement of dispute by mediation was found to be the
attitude of the parties. He is of the view that Mediation was often ineffective when one
or more of the parties had unrealistic expectations, were intransigent or unwilling to
compromise or when both parties were too far a part at the beginning of the process.
1.7.1.2 Nature Of The Case
Nature of the case is one of the determinant of using ADR. Most cases by their nature
are suitable, but some subject matters will be intristically unsuitable for ADR. In the
case ofHalsery v. Milton Keyves GeneralNHS [2004] ELUCA GV 576, the Court
illustrate a number of situation when it might be considered safe to reject mediation.
There is where:-
A party requires a court determination on a point of law;
The issue are important for future business;
8
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
26/42
A case involves fraud or disreputable commercial conduct;
A party desire an injunction; and
There is a need for a binding precedent
(Ilter & Dikbas, 2009)
1.7.1.3 Skills And Knowledge Of The Mediator
The question of who become a mediator has been one of the mostly debated issue.
As mediation involves conflict management, behavioral psychology, communication,
negotiation techniques and voluntariness the judges must be very well trained and
equipped for going to ADR. The training programs are very important and had to be
organized for this context and it should be available for all profession as soon as
possible (Ilter & Dikbas, 2009)
Lack of understanding and experience in ADR can best be overcome by educating
and training. This should be carried out early on in the working lives of professionals
by universities, professional institutions and specialist bodies such as the CEDR.
( Ekene, Ezulike & Hoare, 1998)
2.3 THEORETICAL FRAME WORK
This study reveals that there is one dependant variable which is the use of ADR and
three independent variables which are interest of the parties, nature of the case and skill
of the Judges/Mediator.
The dependent variables is influenced by those three independent variable. Those three
independent variable are also interrelated as explained below.
Nature of the case naturally have a big impact on the type to be used for dispute
resolution. Some cases are very complicated and need for the hard reference of law,
strong arguments, reliable evidence and enough time for preparation. When nature of
9
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
27/42
the case is ignored and the parties choose to inter into a dispute resolution the outcome
of it will not be good for either of the case, because when litigation (normal civil
procedure) is adopted, the parties might end up in bad relationship at the end of the
case, meanwhile, if ADR is used and the parties feels that they are un-satified with the
decision they will lose their chance for appeal. From these we can see that there is an
importance of the Mediator/Judge to have enough skill so he can advice on the
situation of the case and the parties has to be interested to use either of the two methods
and this is where this variables relate.
Skill of the Judge/Mediatoris also an important element in the use of ADR. In order
for the out come of the case to be fair, and effective, not to be bias and base on one
party, the mediator must have enough skills to sit in the table and lead to the mediation.
However, even if the judge is well equipped, but the nature of the case does not support
for ADR, and also parties are not interested. Then it will be difficult for ADR to be
used.
Interest of partiesare also an important element of ADR. If parties to the dispute are
not interested in the usage of ADR but all other element are positive, ADR can not be
used.
In conclusion, both interest of parties, nature of the case and skill of the mediator
significantly influence the use of ADR.
10
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
28/42
CHAPTER THREE
RESEARCH METHODOLOGY
3 INTRODUCTION
This chapter intended to cover the methodology that used when conducting the study.
It provides the framework for specifying the relationship among the study variables
and a plan for selecting the sources and types of information that used in answering
research questions, and achieving the research objectives. The sections covered here
aimed in identifying the causes for inadequate use of ADR in tax dispute settlement.
3.1 RESEARCH DESIGN
The researcher used case study which aimed at identifying the causes for inadequate
use of ADR in tax dispute settlement at the Revenue Appeal Tribunal being the case.
The researcher used the case study because this study was aimed at looking only on
one stage of tax dispute settlement which is TRAT. The researcher choose TRAT to be
the case because, in hierarchy TRAT as considered as equal to the High Court in Court
Hierarchy of Tanzania, and the parties after being aggrieved by the decision of the
TRAT have left with only one place for appeal which is the Court of Appeal, therefore,
if TRAT is able to use ADR and settle the dispute between tax payer and tax authority
the parties will have a good room for resolution without going to the final appellate
body.
3.2 TARGET POPULATIONThe study covered the Chairman and Members of the TRAT, the tax payers and their
representative, the Offices from Tax Authority who represented the Commissioner
General, Management and Staff of TRAT.
The researcher intended to analyse five areas as follows,
11
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
29/42
i) The view of the parties to the dispute on the need of using ADR in tax dispute
resolution.
ii) The current usage of ADR
iii) The intension of the parties in using ADR
iv) The knowledge of TRAT and parties to the case about ADR
v) The important elements in using ADR
3.3 SAMPLING PROCEDURE AND SAMPLING SIZE
3.3.1 Sampling Procedure
The study used both probability and non probability sampling.
In probability the simple random sampling was employed to the majority such as tax
payers, tax consultants and auditors, advocates and officers from TRA representing the
Commissioner General. This was used because the researcher wanted to give equal
chance to the members of population.
In non-probability the researcher applied purposive sampling to selected Chairman,Vice chairman, members of the Tribunal, management and staff because these are
group of population who hold key position. It was believed that the selected sample can
give a picture on what they see and understand about the problem from their
experience.
3.3.2 Sampling Size
One institution was studied which is TRAT and 50 respondents were selected and
examined.
The sampling was as follows:-
i. Members of the Tribunal including the Chairman/Vice Chairman - 6
ii. Management and Staff 1 registrar, 3 officers.
12
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
30/42
iii. Parties to the cases which are:-
(a) 15 Tax payers
(b) 15 Tax payers representatives (10 advocates and 5 tax consultants and
auditors)
(c) 10 Officers from TRA who represented Commissioner General.
3.4 DATA COLLECTION METHOD
In the course of carrying out this research, the researcher was able to use both primary
and secondary data since it was very difficult to rely on one technique or method due to
the nature of the study.
3.4.1 Collection of Primary Data
Methods used to collect primary data/information included Questionnaires surveys,
Interviews and Participant Observation. These are explained briefly in the following
sections:
(a) Interviews
Semi- structured interviews were administered to Chairman, Vice chairman, Members,
Management and Staff of the Tribunal in order to explore the factual data observed by
people interviewed. The aim was to gather information on the causes for inadequate use
of alternative dispute resolution.
(b) Questionnaire survey
The questionnaires were used to collect information from tax payers, representatives of
tax payers and officers from TRA who represented the Commissioner General. The
researcher used both open ended and close ended questions in the questionnaire. Each
item of the questionnaire was developed to address a specific objectives and research
questions of the study.
13
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
31/42
Forty respondents were provided with questionnaires. The questions were asked in the
questionnaires as researcher could probe on any matter arising as salient and useful for
this study.
(c) Participant Observation
Other data or information were collected by participant observation, as a researcher
being a full time employee of the study area who participate in daily routine of hearing
and determining the cases, she had an opportunity to participate in the study and attend
all sessions of the Tribunal hence obtain information needed for the research.
3.4.2 Collection of Secondary Data
Secondary data was obtained from various documents and other written reports
available from different places and main information centers, where different materials
were accessed include libraries at University of Dar es Salaam and High court.
However, most information was available at the TRAT offices through a perusal on
Tribunal case files, case registers, law reports, unreported cases, statutes, journal
articles, legal sector reports and various circulars. Textbooks and websites were also
very resourceful in providing useful information in the course of writing this research.
3.5 DATA ANALYSIS & INTERPRETATION
Both qualitative and quantitative techniques were used. This is because of the nature of
the data and information that obtained during the research.
Quantitative data analysis was used to describe the data in the form of numerical values
accompanied by charts, tables, and percentages. The responses were summarized and
tabulated and percentages were computed by using MS Excel software package to
establish relationship of various variables. Finally the researcher will reveal the internal
validity, reliability and objectivity of the research conducted.
On the other hand qualitative means was employed to describe information that is not
of numerical nature.
14
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
32/42
CHAPTER FOUR
AN OVERVIEW OF THE TAX REVENUE APPEALS TRIBUNAL (TRAT)
AND THE CASE SETTLEMENT PROCEDURE.
4. INTRODUCTION
The intension of the researcher was to find out the causes for inadequate use ADR in
tax disputes settlements where Tax Revenue Appeals Tribunal was a case study. It
became meaning less to discuss the tax disputes resolution without having a clue of
what Tax Tribunal is, this is because TRAT is the only institution in Tanzania which
has the power to entertain tax disputes with an appellate jurisdiction same as High
Court.
4.1 BACKGROUND
4.1.1 The history before 2000
Prior to the establishment of the New Unified Tax Appeals Machinery, there was the
National Tax Appeals Board, which had jurisdiction to hear and determine only Income
Tax Appeals arising from the decisions of the Commissioner of Income Tax. After that,
the aggrieved party had a room to appeal to the High court and finally to the Court of
Appeal of Tanzania.
4.1.2 Establishment of the unified tax appeals system
Due to the fact that tax cases are very sensitive and require special attention as tax
being the main source of income or revenue in our country, and that following the tax
appealing system in that time, tax cases were taking longer in determination process
hence either the government was loosing the income or tax payers was loosing their
access to justice as the saying goes justice delayed is justice denied.
15
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
33/42
So in year 2000, the Government decided to establish Unified Tax Appeals machinery
under which tax disputes arising from all Revenue laws administered by Tanzania
Revenue Authority (TRA) have to be lodged in the same appellate authority.
In order to implement the policy of unified Tax Appeal machinery the Parliament
enacted the Tax Revenue Appeals Act, Cap 408 [RE 2006], which establishes Tax
Revenue Appeals Board and Tax Revenue Appeals Tribunal.
These Tax Revenue Appeals Board (TRAB) and Tax Revenue Appeals Tribunal (TRAT)
are quasi-judicial institutions, established under Sections 4 and 8 of the Tax Revenue
Appeals Act, Cap 408 [RE 2006] respectively. Hierarchically TRAB is jurisdictionally
equivalent to Resident magistrate court and TRAB is jurisdictionally equivalent to High
Court.
4.2 AN OVERVIEW OF TRAT
4.2.1 Objective
The core objective of establishing the Tax Revenue Appeals Tribunal is that of a
speedy, efficient, effective and impartial resolution of tax appeals arising from decision
of the Tax Revenue Appeals Board.
4.2.2 Function of the Tribunal
The functions of Tax Revenue Appeals Tribunal are as follows:-
a. To hear and determine, tax appeals arising from decision of the Tax Revenue
Appeals Board as provided for by Section 11 of the Tax Revenue Appeals Act,
Cap 408 [R.E 2006].
b. To supervise Tax Revenue Appeals Board in the exercise of its powers under
Tax Revenue Appeals Act, Cap 408 [RE 2006]
c. Giving advice to parties to tax disputes on procedures of appealing to the
Tribunal.
16
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
34/42
d. To provide public awareness on Tax Revenue Appeals Act and other related tax
laws.
4.3 DISPUTE RESOLUTION MECHANISM
4.3.1 Appeal procedure
(a)Start of the Appeal
The appeals start at TRAB after the tax payer being aggrieved by the decision of the
Commissioner General, TRAB determine the case and give out its decision. Any one
who is not satisfied with the decision of the Board lodges an appeal to TRAT.
A person who wishes to appeal to the Tribunal shall issue a written notice of intention
to appeal within fourteen days from the day of the decision of Board. The said notice
shall state whether the intended appeal is against the whole decision or part of the
decision of the Board.
A notice of intention to appeal shall be made in the Form TRT .1 and shall be signed by
or on behalf of the appellant. Where the Registrar has received a notice of intention to
appeal he shall endorse on it the date on which it was received and register all
particulars.
An appeal to the Tribunal shall be instituted by lodging a statement of appeal within 30
days from the date when the decision of the Board was delivered. Every appeal shall be
made in Form TRT .2. Upon receipt of appeal, the Registrar shall endorse on it the date
on which he received it. The appellant shall pay the appropriate amount of fees when
instituting an appeal to the Tribunal.
(b). Fees Payable
A person filing an appeal is required to pay non refundable fee of Tshs. 10,000 upon
lodging notice of intention to appeal, Tshs. 100,000/= upon lodging statement of
appeal, Tshs. 20,000/= for preparation of records of appeal, Tshs. 30,000/= for
17
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
35/42
application for extension of time to appeal, Tshs. 20,000/= for application for execution
of a decree or order.
(c) Important documents for the appealing procedure
A person who institutes an appeal to the Tribunal shall attach the following documents:
1.A Certified copy of the proceedings of the Board.
2.A Certified copy of the decision of the Board.
3.A copy of the decision of the Commissioner General which gave rise to appeal to the
Board.
4.A copy of the notice of intention to appeal to the Tribunal.
5.Evidence of payment of appropriate fees.
(d) The Composition of the Tribunal
The composition of the Tribunal is made up of a Chairperson, two Vice Chairperson one of whom
from Tanzania Zanzibar and four members. The quorum in any meeting is made up of the
Chairperson or Vice Chairperson sitting with two members.
The Tribunal has a Registrar who handles all administrative matters of the Tribunal. The Registrar
receives and registers appeals and applications. The Registrar also does taxation of bill of costs.
(e) Missing of the appeal time
If one misses the deadline to appeal to the Tribunal within stipulated time, may apply to the
Tribunal for extension of time within which to file an appeal. However, the Tribunal may
extend the time if it is satisfied that the failure by a party to give notice of appeal, lodge an
appeal or to effect service to the opposite party was occasioned by absence from the United
Republic, sickness or other reasonable cause.
(f) Procedure to follow after the decision of the Tribunal
After the case being determined by TRAT and a party is dissatisfied with a decision of the
Tribunal he may appeal to the Court of Appeal of Tanzania being the last appellate court in
the court system of our country, within fourteen days from the date the decision of the
18
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
36/42
Tribunal was delivered. The appellant shall pay Tshs. 1,500/= being a fee for notice of
intention to appeal.
4.3.2 Diagram to show tax appeal resolution machinery and its hierarchy
Figure I; tax appeal resolution machinery and its hierarchy from 2000 to date
Source: Researcher in the field, 2010
4.3.3 Cases registered and decided since establishment
As stated earlier that TRAT was established by the Act of Parliament of 2000, Cap 408,
but it became operationally in 2002. Since then the Tribunal has registered, heard and
determined the appeals and applications as follow;
19
COURT OF APPEAL OF TANZANIA
TAX REVENUE APPEALS TRIBUNAL
TAX REVENUE APPEALS BOARD
FINAL DECISION OF THE
COMMISSIONER GENERAL
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
37/42
Table I; Summary of the cases registered since 2002
YearNumber of Appeals
Registered
Number of
Application
Registered
Total
2002 10 3 13
2003 10 8 18
2004 7 7 14
2005 13 18 31
2006 38 33 71
2007 20 30 50
2008 7 11 18
2009 15 9 24
2010 21 8 29
TOTAL 141 127 268
Source: TRAT register
4.3.4 Evaluation of the methods used in deciding those cases
As a matter of procedure, after the case being filled to Tribunals registry, it has to be
heard hence the decision has to be made. Regularly cases went for full hearing as it was
started by section 18(1) of the TRAA, Cap 408 R.E of 2006 which states that:
18(1) Proceedings of the Board and Tribunal shall be of judicial
nature and shall be conducted on such occasions and at places as the
chairman may direct.
20
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
38/42
However, Tribunal is also powered to use ADR which includes mediation, arbitration,
and conciliation in dispute settlement procedure. This power is provided under section
17(1) of TRAA, Cap 408 R.E of 2006 which states as follows:
17(1) The Board and the Tribunal shall respectively have the power
(c)
(d) To resolve any complaint or appeal by mediation, conciliation or
arbitration
The table below represents the summary of the procedure used in dealing with the
registered cases.
Table 2; Methods used to determine the registered cases
Number of
cases
registered
Number of
cases
withdrawn
Number of cases
went for full
hearing
Number of
cases settled
between the
parties
268
Percentage
(%)
Source: TRAT register
21
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
39/42
CHAPTER FIVE
RESEARCH FINDINGS AND DATA ANALYSIS
22
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
40/42
CHAPTER SIX
SUMMARY OF THE FINDINGS, CONCLUSION AND RECOMMENDATIONS
23
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
41/42
BIBLIOGRAPHY
Adam, J & Kamuzara, R. (2008) Research Methods for Business and Social Studies.
Morogoro,Mzumbe Book Project
Banner, D.K (1995) Conflict Resolution: A RecontextualizationLeadership & Organization Development Journal
16(1), 31-34
Brooker, P (2009) Criteria for the appropriate use of mediation in construction disputes
International Journal of Law in the Built of Environment
1(1), 82 97
Ezeluke, I. & Hoare J. D. (1998) The need for education in alternative disputeresolution (ADR) in the construction industry
Engineering, Construction and Architectural Management
5(2), 144 - 149
Gahr, R., & Mosca J. B. & Sarsa, S., (1995) Conflict Resolution and Mediation
.Leadership & Organization Development Journal
16(8), 37-39
Ilter, D. & Dikbas, A. (2009) An analysis of the key challenges to the widespread useof mediation in the Turkish construction industry
International Journal of Law in the Built Environment
1(2), 143-155
Merricks, W (2007) The financial Ombudsman Service: not just an alternative to court
Journal of Financial Regulation and Compliance15(2), 135 142
Osland, A & Osland, S J. (2007) Aracruz Celulose: Best practices icon but still at riskInternational Journal and Manpower
28(5), 435 450
Richardson, J (1995) Avoidance as an active mode of conflict resolution
Team Performance Management an International Journal
1(4)
Sigh, R (1995) Dispute resolution in Britain: contemporary trends
International Journal of Manpower16(9), 42-52
Vlassenko, I (2001) Evaluation of the efficiency and fairness of British, French andSwedish property tax systems
Property Management
19(5), 384 416
24
-
7/28/2019 causes of inadequate use of ADR in tax dispute settlement
42/42
APPENDICES