Introduction

The Finance Act, 2022 amended Section 45A of the Tax Administration Act, 2015, which requires any person who establishes a storage facility with the aim of keeping goods for business purposes to register the facility with the Commissioner General. 

Registration process

The Commissioner General shall register the facility and assign a registration number upon production of the following information:

  1. name and address of the owner of the storage facility;
  2. TIN number of the owner;
  3. details of the nature of goods that are kept in the storage facility; and
  4. such other particulars as the Commissioner General may direct.

Other obligations of the storage facility owner

A storage facility owner shall have the following obligations in addition to the registration requirements:

  • Obligation to notify TRA, within 30 days, of the changes in the particulars of the facility;
  • Obligation to keep proper records of the goods stored in the facility in the manner prescribed by the TRA;
  • Obligation to submit to TRA a stock movement ledger which shall disclose the goods stored in his facility during the month, including owners of the goods, origin and destination. The requisite return shall be submitted no later than the seventh day of the following month.

Offense and penalty

Where the TRA is satisfied that the storage facility has not been registered or goods have been kept without being reported as required, the facility owner shall be liable to a penalty of up to TZS 4,500,000 and required for payment of detected loss of Government revenue with respect to undisclosed goods.

Our observations

The terms storage facility is not defined in the Act or Regulations. This may result in ambiguities in terms of what storage facilities should be registered for this purpose.

There is no registration threshold implying that all storage facilities shall be registered irrespective of the value of the stored goods.

Further, the Regulations impose the obligation for both registration and filing of monthly returns to the facility owner. However, one may appreciate the fact that not all storage facilities are maintained and managed by the owners since some facilities are leased as well. Hence, in this case, it might be challenging for the legal owner to track the movement of the goods in the facility.

The way forward

Whilst there are uncertainties with regard to the process of registration and submission of monthly stock movements, it is important to communicate and consult the Revenue Authority by seeking clarifications and ensuring you are compliant with the new requirements in order to mitigate any penalties. Please reach out to us if you require our assistance in seeking clarification from the Authority.