Economic & Commercial Law
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Item The qualifications of company directors and the performance of companies in Tanzania: Critical analysis of the companies Act, 2002(Mzumbe University, 2012) Jangu, Luckness WA company is in the eyes of law an artificial person, with no physical existence; neither soul nor body of its own as such it cannot act on its own, it can do so through some human agency called the directors1. These directors are entrusted with the interest of others; they are not allowed to make the business an object of interest to themselves because from the frailty of nature, one who has power will be too readily seized with the inclination to use the opportunity for serving his own interest at the expense of those for whom he is entrusted.2 This being the case the company needs to be in the proper hands of person who mans it, as the success of the company depends ultimately on the calibre of its directors and the effectiveness of the board. The law puts qualification for a person to be appointed as a director to make sure that the company is under control of a proper person who can be accountable for his own actions. Need for responsibility and accountability have impelled rules circumscribing the qualifications, conducts and responsibilities of company directors. The modern commercial world demands security and certainty when dealing with the corporate person. The companies Act, 2002 provides for the qualification of a company director to include among others, share qualification if the articles of association of the company so require, age limit from 21 to 70 years, a person not discharged bankrupt or not convicted in any offense in relation to the management of the company, and signification of consent to the registrar of companies. This research looked at the qualification of the Company directors in the Companies Act, by making an analysis to see whether the said Act is adequate or not and if not whether the inadequacy has significance impacts on the performance of the companies.Item The assessment of challenges and prospects of capital markets development: A case study of Tanzania(Mzumbe University, 2013) Wanjah, A. HamzaThis study assessed the Challenges and Prospects of Capital Markets Development in Tanzania. The specific objectives were to analyze the extent of the capital market challenges of the past fifteen years since the establishment of DSE and CMSA; to examine the achieved capital market development prospects of the past fifteen years since the establishment of the DSE and CMSA; to outline and understand the current newly emerging capital market challenges and prospects starting year 2010; and to determine the current status of the capital market development in Tanzania. The study was conducted at Dar Es Salaam City and involved a sample size of 80 respondents drawn from Top Managers and the personnel from the Dar Es Salaam Stock Exchange (DSE), the Capital Market and Securities Authority (CMSA), Brokerage Firms and Private Advocates, who were selected through random and purposive sampling techniques. The data were collected through a combination of techniques namely; interviews and questionnaires. The collected data were analyzed through the use of SPSS, discussed and presented through the use of figures, tables as well as text. The study reveals that there are challenges for the capital market development that remain unsolved since the establishment of the CMSA and the DSE, despite the prospects experienced to the market. Hence the study recommends for more reforms to our laws and policies governing the capital market business, demutualization of the DSE, Stock Markets integration so as to make the market flexible hence rapid development of the market. The findings further revealed that market is illiquid as there are few trade able securities and few investors too. That major players in the business are the pension funds, which hold assets at certain ratio at marketable prices.Item Investment and land disputes in Tanzania: A vehicle for investment legal reform(Mzumbe University, 2013) lendita, Simon WLand is the natural vital asset owned by person or persons. Although land plays a major role in social and economic development, its management remains doubtful in Tanzania. Land has become strength of the Tanzania Investment Center in advertising and promoting investment in the country. For this reason the land laws of 1999 (Land Act No. 4 and the Village Land Act No. 5) reflect the disposition of land for investment purposes especially acquisition of land by foreign investors. Laws governing access to land remains subject to criticism as land disputes between investors who allocated land and the surrounding local communities keeps on increasing across the country. This dissertation comprises five chapters whereby Chapter one provides for the background to the problem, statement of the research problem, objective of the study, literature review and research methodology. Chapter two covers the historical background of land tenure system in Tanzania. Chapter three provides for acquisition of land for investment purposes in Tanzania; legal framework. Chapter four provides for the extent to which land laws regulate acquisition of land for investment purposes in Tanzania. The fifth chapter provides for the General conclusions and recommendations. The researcher used qualitative method in conducting the study. The sample technique employed in carrying out the study was purposive and the researcher administered questionnaires and interview to sample individuals. The study aimed to critically study and evaluate the whole process involving the acquisition of land for investment purposes and to investigate the factors contributing to land disputes between investors and surrounding local communities. This is the study carried out for academic purposes as a mandatory requirement for the award of Master‘s degree of laws (LL.M Commercial law) at Mzumbe University. The study used qualitative approach which involves literature review, interview and questionnaireItem Tax avoidance in Tanzania mainland: The law and practice of anti – avoidance provisions under the income tax Act No.11 of 2004(Mzumbe University, 2013) Nongwa, Victoria MIt is expected by the society that they pay tax to raise government revenues so that in return the society is provided with all the services from the government, these are social services , maintaining law and order, ensuring defence and hosting other undertakings which the state feels are better be provided by itself, like health services. Tax payment is not a new idea in Tanzania mainland because it has had taxation system since the turn of the century all with the aim of being a handmaid for raising revenues to meet government expenditure. As stated above the society have their expectations when paying tax, however there are many tax payers who evades taxes not withstanding that there are penalties for that act simply because they feel that the government is not performing well in providing the society with social needs and end up using revenue on other issues. Not all citizens have positive attitude to the act of paying tax, this may be caused by many factors most of which are caused by the government itself by failing to provide social services to the satisfaction of the citizens. Therefore citizens would wish to use any means either to reduce the Tax burden or evade paying tax. The desire to avoid payment of tax need not bring a surprise particularly in developing countries like Tanzania. In the usual case it will amount to no more than a sensible use of the available exemptions and reliefs which are provided in all tax legislation. In other cases, where sums avoided are greater, the methods adopted by the tax planning industry to escape the fiscal net may take on a complexity that is beyond the comprehension of most individuals and may involve schemes which are divorced from reality. Tax avoidance is the use of legal methods to modify an individual's financial situation in order to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which is illegal. Taxation in Tanzania is based on law, under the Constitution of the United Republic of Tanzania no tax of any kind shall be imposed save in accordance with a law enacted by the parliament or procedure lawfully prescribed and that have the force of a law or by virtue of a law enacted by the parliament. In this study, most of the issues on tax avoidance have been addressed and analyzed including the loopholes that still exist to attract taxpayers to plan to avoid tax and solutions to problem. Reviewing tax laws regularly is of most importance so as to be in line with the fast changing world in business environment like e-commerce, and different means of money transfers like the mobile banking. There is a need to have Tax Laws free from ambiguities in that they should not create loopholes that will attract more and more Tax avoidance acts as it is with transfer pricing provision under the Income tax Act. There is need to improve good governance so that the legitimacy of the government is enhanced, adequate resources need to be provided to promote voluntary taxpayer compliance. Although tax avoidance has the same cost to the nation as it is with the tax evasion, tax avoidance is generally tolerated even encouraged some times. Judicial decisions on legality of tax avoidance have ensured that there is no stigma for indulging in the tax avoidance as it is for tax evasion. However, tax avoidance is equally complex and expensive exercise. Those with no means to hire tax planners are left to suffer in silence the tax burdens they cannot appreciate thus resorting into invoking ways to attack the tax system including corrupt practices by bribing tax officers. It has also been noted that ignorance of tax laws in Tanzania also results from legislative process not being inclusive enough. Enacted Laws are really well disseminated to the public as the passing of tax laws are also bureaucratic and secretive thus TRA still have a duty of advocating for tax laws to public in particular promotion of tax payer education programs that are being conducted by the TRA. Lack of adequate accountability for the Government has impacted negative attitude on tax payers‟ compliance to tax. The Government is perceived to be corrupt as per major corruption scandals in 2008 that were revealed forcing the Prime minister to resign. Tax laws should be harmonized so as to do away with the current multiplicity of tax laws which defeats taxpayers‟ positive perception to tax laws. Multiplicity of tax has been the factor for tax payers to concentrate on ways to escape the tax burden by any means be it legal or illegal. Tax laws in Tanzania do not encourage taxpayers to comply voluntarily with taxes. This study recommends for amendment to section 33 of the Income Tax Act so that it can specify methodology for determining what constitutes an arm‟s length price, there should be in place provisions requiring taxpayer to prepare transfer pricing documentation. At the same time the government should timely act on the enactment of tax instruments whenever loopholes are detected by TRA and other stakeholders. Not only that but also TRA should issue the practice note to clarify what approach it will follow to give effect to the transfer pricing provisions. Tax systems should expand tax base and reduce tax rates because the expansion of the tax base would reach to the extent of full collection of tax and at the same time tax system to reduce multiplicity of Tax laws in the system. There should be a tool in place that would make tax authorities to have access to information especially for cross border transaction for transfer pricing issues, this will help Tax authorities in finding data on transfer pricing when determining whether the transaction price is in accordance with the principles on Transfer Pricing. It becomes difficult for tax officers to gather information for determining the relationship of the transacting companies at a particular time especially where they multinational corporations.Item Analysis of the law and practice governing letter of credit: A case study of selected institutions in Ilala Dar es salaam(Mzumbe University, 2013) Otieno, MagrethLetters of credit are an important finance instrument for international trade. They are especially significant in cross-border transactions where traders do not know each other. Despite the attractiveness of the process, by choosing letters of credit, international traders often have trouble. In particular, they find it difficult to meet the level of documentary compliance demanded by many banks. In turn, this increases the risk of non-payment for goods or services invested. This also could have a profound impact on international trade patterns. Clearly, this suggests that the governing rules are not clear enough as to how strictly the doctrine is to apply. In addition, courts all over the world have not cured the deficiencies in the application of the rules. In fact, ICC have added to the confusion by creating a myriad of controversial judicial standards that apply to similar mistakes in the presented documentations. This thesis is an investigation into these issues. In so doing, it attempts to find out what could reduce the inconsistent interpretations of the doctrine of strict compliance and thus enhance the attractiveness of the letter of credit. The analysis covers all parties involved in the letter of credit process, and pays particular attention to those cases involving misspellings, discrepant descriptions of goods in commercial invoices, ambiguous or impossible letter of credit terms, and inaccurate data in presented documents. Among other things, the thesis reveals that courts have applied six different standards to the matter of misspellings alone. As a result, banks have applied the strict compliance rule very rigorously to protect their own interests in case litigation would ensue. The flipside is sellers left with the risk of not being paid. The question arises whether this is reasonable given the facts that only trivial mistakes may be a vitiating factor in the letter of credit transaction. Therefore it is recommended that there should be a reform of the law governing letter of credit including Tanzania enacting its domestic laws, flexibility on the court procedures in case of defaultItem The inter-banking automatic teller machines use (ATMS): Its legal challenges in Tanzania.(Mzumbe University, 2014) Mwetindwa, Asha.H.This study is about the Inter -banking Automated Teller Machines (ATMs) its legal challenges in Tanzania. As the use of ATMs expeditiously expanding and almost becoming the way of life to many Tanzanians, the legal framework does not respond to meet with the current development. The researcher undertook this study to find out these legal challenges the banking industry faces especially in dealing with /providing ATMs services and the protection of the customers ultimately suggested the better ways to protect the customer’s right and well deal with the legal challenges brought by these developments in ICTs. The study is qualitative one; the researcher has used interview and questionnaires as the means of obtaining the information from the respondents such as bankers from NMB, NBC and CRDB. The researcher also collected data from lawyers, judicial officers as well as customers of the banks. THE STUDY FINDS OUT THAT there are no specific laws and regulations regulating the operation and use of Inter –banking ATMs. All the lawyers who are the respondents stated that ATM transactions are guided in general legal framework hence lack the effectiveness to curb the peculiar features in the area thus the customers‟ rights are not well protected. The study also revealed various advantages that are being experienced by not only the bank customers but also the banks and the general public at large. Thus the study recommends that it is high time to have the specific laws to regulate the ATMs in place so as to assure the protection of the rights of those dealing with the instrument.Item A critical analysis of law and practice of public private partnership in Tanzania: A case study of Kigoma District(Mzumbe University, 2014) Ndabhona, Iddi A.This study was made on analysis of the law on Public Private Partnership in Tanzania, particularly the Public Private Partnership Act, 2010 and its enabling regulations, the Public Private Partnership Regulations, 2011, GN 165 /2011. The research was done through interviews and documentary reviews. As the first objective of the study, researcher examined the efficiency of PPP Act in Tanzania. It was revealed and concluded that although the definition of PPPs in the PPPA entails all kinds and forms of PPPs, the regulations leave out of box all the traditional, simple but many forms PPPs which are practicable to many common Tanzanian entrepreneurs. Nevertheless, the bureaucratic nature of the PPPA reduces its expected efficiency. The significant time and monetary resources are spent at the preliminary stages regardless of whether or not the expected project would be implemented. The second specific objective was to look on whether in practice the law promotes the PPP with indigenous private entities in our country. It has been observed that the processes in the Act make the way through to PPPs too long and cumbersome. As such, the law is not very much encouraging and promoting PPPs in the same parse as it would be expected to in the current world business environment. The last objective was to examine whether the PPPA affects independence of the independent Government bodies such as LGAs in Tanzania. It is concluded that the powers of the independent government entities like local government authorities to enter into PPP arrangements are confiscated by the central government through various bodies established by the PPPA. In that respect, the researcher has recommended some mitigating measures to be taken so as to handle those inadequacies. The measures include; amendment of PPP regulations, GN. No 165/2011; formulation of PPP regulations for small scale PPPs in the country; and strengthening indigenous entities for PPPs.Item Critical assessment of the challenges faced by ZIPA in ensuring investors’ compliance to intended investment(Mzumbe University, 2014) Juma, Faraji SThis study is about critical assessment of challenges faced by ZIPA in ensuring investors‟ compliance to intended investment. This research was aimed at examining the challenges faced by ZIPA in ensuring investors‟ compliance to intended investment in Zanzibar. In realizing this goal, the tourism sector was chosen as a focal study in this research and the researcher examined the Zanzibar Investment Promotion and Protection Act 2004, the Zanzibar Employment Act 2005, the Immigration Act, 1997 (Revised Law), the Zanzibar Tourism Act 2009, the Transfer Land Act 1994 and the Land Tenure Act 1992 so as to assess those challenges in ensuring the investors‟ compliance to intended investment. This study was basically a qualitative research which was aimed at enabling collection of detailed information about the problem under study. The researcher used interview guides and questionnaires as tools of collecting detailed information from the respondents. Kinds of sampling being used in this study, was purposive sampling where total of 22 respondents; among them, there were investors, lawyers and other stakeholders. This number and kind of respondents provided good findings concerning challenges faced by ZIPA in ensuring investors‟ compliance to intended investment are as there is the weakness of the legal frameworks in Zanzibar, there is a bureaucracy and corruption in the government institutions and failure of the government to harmonize the East African laws. Also, disputes in the society and the absence of the legally recognized rules of investment. In this, the researcher recommended that the government has to review all laws of investment as well as the corruption law in order the investors to comply them attentively and due to the union of East African Community, the harmonization of laws is also very important. The government has to reset ZIPA to be as a really One Stop Centre.Item Causes and consequences of failure to file the annual return by the tax payer: A case study of Shinyanga municipality(Mzumbe University, 2013) Samwel, FrankMost of the tax payers in Tanzania do pay tax without filing the annual returns and they always complain about paying more tax than what they think they are supposed to pay. This research focuses on the cause and effects of the taxpayers‟ failure to file the annual returns during tax assessment for tax liability. This research was done through interviews, questionnaire and schedules on the sample size of 120 respondents selected specifically from businessmen and women, noon business persons, people who were formally business people, tax consultants and TRA officials, but picked randomly within the group. From the research, it was found that, failure to file the annual return by the tax payer is caused by the two things; tax payer’s lack of knowledge on the law and procedure to be followed during their tax liability assessment and lack of enough fund to bear the costs for preparing the necessary documents necessary for the annual returns. Also, failure to file the annual returns has the effect to high tax being imposed on the tax payer. At the end, the researcher recommends that the law should change in order to simplify the requirements for filing the annual returns to enable even the normal businessperson to file them. Secondly, the tax payers should be educated on the procedure required for them to follow during the period of tax assessment in order for them to have fair tax assessment. Thirdly, TRA to diversify its sources of collections on tax in order not to shift the whole burden to the business people. Fourth, TRA tax assessors should not unreasonably impose higher tax on the tax payers. Lastly, tax assessors should visit the tax payers before imposing tax liability on the tax payer. If these recommendations are followed, enough revenue will be collected for the government, business and investment will not be hindered as per Tanzania’s tax policy.Item Protection of individual investors at the Dar es salaam stock exchange: A critical analysis of the law(Mzumbe University, 2013) Sempeho, Laura GThis work is about the protection of individual investors at the Dar es Salaam Stock Exchange (DSE). The researcher focused on individual investor as a minority group, who invested less number of shares than institutional investors. The work aimed at checking the effectiveness of the laws and regulations at the Dar es Salaam Stock Exchange and how they guarantee investor protection. The research was conducted in Dar es Salaam city where the DSE and CMSA offices, the Securities brokerage firms and most of the individual investors are located. The data was collected from DSE and CMSA legal departments through interviews of the officials. At the Securities Brokerage offices structured interviews were conducted to obtain primary data. Questionnaires were issued to Eighty (80) individual investors from different professions and specializations, five investors from each of the sixteen listed companies at DSE. The researcher found that the laws on stock market guarantee investor protection but the major hindering factor is the application of the said laws on investors who do not have adequate awareness on their rights, on the prohibited practices, and even in reading the financial statements of the companies invested in. Further, the DSE and CMSA lack the adequate technology to detect the prohibited offences such as the insider dealing which limits the protection of the interests of investors. The recommendations are to increase the awareness of the individual investor through the LDMs and brokers who deal with the investors on a day to day basis. There is also a need for improvement of technology to detect prohibited offences and facilitate in collection of evidence to prosecute offenders.