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Carrying driving licence

KH, Dar

Whether you were driving ‘peacefully’ and ‘safely’ has no relevance here to the demand by the police officers to produce your driving licence. The Road Traffic Act is clear that every driver shall carry their driving licence and it may be examined on being required by a police officer. This Act does not specify occasions or events that must occur for you to produce your driving licence. Hence you must carry this licence with you otherwise proving that you have a driving licence becomes difficult.

In the event that you fail to produce a licence, you cannot be convicted for failure to carry it if you produce the licence within 3 days at a police station specified by the police officer. If you do not have a valid driving licence at all, the offence is punishable under the Act and depending on the circumstances, you may also be imprisoned.

To answer your last question, a valid international licence is recognized under our law. We strongly recommend that you carry your driving licence at all times- it helps the police do their jobs properly and ensure your and everyone’s safety on the roads.

Desertion of Child and neglecting to provide food

I have seen a lady in Dar es Salaam who does not provide for her young children. She says it is her who decides on the child’s welfare not anyone else. She hardly cares about them though she is able to do so. Is this not an offence?

BN, Dar

Any person who is the parent, guardian or other person having lawful care or charge of the child is obliged to provide the necessities of life like food, clothes, bedding etc for the better welfare of the child. Leaving the child without means of support is an offence of desertion punishable by law. In addition, refusing to provide the necessities of life so as to injure the health of child is equally an offence. These offences are punishable with imprisonment for two years or with a fine or with both.

Taxability of donation amounts

Over the many years I have been contributing to a charitable institution in Dar which the Tanzania Revenue Authority (TRA) say has been improperly registered. I was a major donor in terms of food items that I also supply in the market and which is my main line of my business. The TRA have now disallowed the entire donation I have been making over the last three years claiming that I have been oversupplying. My second question is if I transfer an asset for free, I do not understand why I should be paying tax on that transaction. Tanzania is the only country that taxes such a transaction. Is this the correct interpretation of the law?

EL, Dar

The Income Tax Act of 2004 allows you donate to charitable institutions but has capped the amount you are allowed to deduct from your profit and loss statement. The law states clearly that for the purpose of calculating a person's income for a year of income from any business, there shall be deducted- (a) amounts contributed during the year of income to a charitable institution or social development project; and (b) any donation made under section 12 of the Education Fund Act, 2001.

The law further states in subsection 2 that the deduction available under the above for a year of income shall not exceed two percent of the person's income from the business.  From the above, you can note that the law only allows you to donate and deduct a maximum of 2 percent of your income. Any amounts donated in excess of 2 percent can be donated but not deducted as an expense.

Your second question is very interesting in the sense that you suddenly decide to give away your asset to someone, for free, and expect there to be no taxation. Your intentions might be honest, but the TRA have no ways of determining your honesty in such a transaction. There is no ‘honesty meter’ that can be plugged in and determe the motives behind this.

Hence the law has categorically provided that  where a person realises an asset by way of transfer of ownership of the asset to an associate of the person or by way of transfer to any other person by way of gift - (a) the person shall be treated as deriving an amount in respect of the realisation equal to the greater of the market value of the asset or the net cost of the asset immediately before the r e a l isation; and (b) the person who acquires ownership of the asset shall be treated as incurring expenditure.

You are also misguided about Tanzania being the only country that taxes such transactions. We took the liberty of looking at tax statutes of Uganda, Kenya, South Africa, India, the United Kingdom and Canada. All the tax statutes from the countries above also tax, some even more rigorously, such transactions. Hence your claim that Tanzania is the ‘only’ country that taxes this way is unfounded.

Taxes are important for national development. If such transactions are not taxed, everyone will claim a free transfer to a friend, associate, cousin etc so as to avoid taxation. Where can a line then be drawn? For further guidance you should consult your tax consultant.

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