Many newly established businesses or companies often find themselves in a state of uncertainty, unsure of what to do, due to the imposed penalties and interest resulting from the initial registration of the company, the operations of the business, or non compliance with relevant laws. Additionally, they may lack knowledge of tax compliance from the early stages of their business. 👀

In such circumstances, what actions can be taken to resolve the matter? Let us delve into the provisions of the law to explore the rights and responsibilities of taxpayers.

📚 Section 70 of the Tax Administration Act of 2015 provides that, “Where the Commissioner General is satisfied that there is good cause to remit interest or penalty imposed under any tax law, he may remit the whole or part of the interest or penalty payable by that person”. Therefore, as a taxpayer you have the privilege of making an application for the remission of penalties that may arise during the operations of the business.

🔦Conditions for the Remission of Interest and Penalties;

✅ For the remission of interest and penalties, there has to be a good cause well explained detailing the reason for the occurrence of non-compliance that led to the imposition of the interest or penalties. The cause, such as financial hardship, can be an acceptable reason for remission of interest where the hardship existed when the tax liability was due and is communicated to Commissioner before the due date of the payment of the tax liability.

✅ If available, the supporting document that supports the application.

✅For the principal tax liabilities assessed, the liabilities must be paid to demonstrate the good cause of compliance before making an application for the remission of interest and penalties.
✅ The application must be submitted through the designated system.

🎯It is therefore imperative to note that the decision of remitting interest and penalties, as stipulated under section 70, is vested in the Commissioner General. He may remit the entire or partial amount of interest or penalty payable by the person.

What measures can be taken to prevent future interest and penalties due to non-
compliance?

✅ Before establishing a business, seek tax education from a tax consultant to gain comprehensive knowledge of overall tax compliance and the obligations you will face.
✅ Familiarise yourself with each tax type you are responsible for and their respective due dates.
✅ Engage the services of a qualified professional tax consultant to assist you in managing and fulfilling all compliance requirements.
✅ Perform half or yearly tax health checks to see the overall business compliance, this can be done with tax expert.

“but in this world nothing can be said to be certain, except death and taxes.”
― Benjamin Franklin

For Assistance Contact
📩 info@elvinconsulting.co.tz
📱 +255 769 769 130