By Faustine Kapama
3rd October 2016
London-based giant gold mine company, African Barrick Gold Plc (AB G), has once again lost its appeal against being found to have evaded tax for four years consecutively from 2010, amounting to 81,843,1327 US dollars (over 160bn/-).
This follows the decision of the Court of Appeal to “strike out” the appeal AB G, the appellant, currently known as Acacia PLC, had lodged to fault the judgment issued on March 31, this year, by the Tax Revenue Appeals Tribunal on the matter.
Justices Edward Rutakangwa, Salum Massati and Stella Mugasha ruled in favour of Commissioner General with Tanzania Revenue Authority (TRA) after observing that the appeal by AB G was incompetent for failure to include key documents in the records, like documentary evidence tendered at the trial.
According to the justices, there was no gainsaying here that the omission to include the documentary evidence tendered at the trial does offend against the mandatory provisions of Rule 96 (1) (f) and (2) of the Rules, which is clear and elaborate on what the record of appeal should mandatorily contain.
“We have no flicker of doubt in our minds that these documents are very necessary for conclusive determination of the appeal. Being core or primary documents in this appeal, failure to incorporate them in the record renders the (same) incurably defective and the appeal incompetent,” they declared.
Among such documents were affidavits read and all documents put in evidence at the hearing, the order if any giving leave to appeal, the memorandum of appeal, record of proceedings, the judgment or ruling, the decree or order and the notice of appeal.
The AB G business entities in Tanzania, include Bulyanhulu Gold Mining Limited, North Mara Gold Mining Limited and Pangea Minerals Limited, which operates the Tulawaka and Bunzwagi Gold Mines.
It had declared dividends in UK to its shareholders on the income generated from gold mines operated in Tanzania amounting to 412,504,257 US dollars for 2010 to 2013 years of income.
However, the AB G declared to have incurred loss in Tanzania, where the three gold mine companies operate. Nevertheless, the Tribunal composed of three members under the chairman of High Court Judge Dr Fauz Twaib had stated in its judgment dated March 31, 2016; “Indeed, we share the (Tax Revenue Appeals) Board’s surprise as to how could this be possible,” said the Tribunal.
The Tribunal dismissed the appeal lodged by the company to challenge findings of the Board, saying it was inconceivable that AB G could pay so much money in dividends for four consecutive years, while its only assets were the three loss-making entities incorporated in Tanzania that do not make any profit. “The Board expected some clarification of this rather strange state of affairs and proof as to how it could be possible.
That proof, unfortunately, was not forthcoming from the appellant and its witnesses and counsel’s explanation fell short of an adequate discharge of relevant burden,” the Tribunal observed.
One important issue and which had attracted fierce criticism from the appellant’s counsel stems from the Board’s acceptance of the contention by the Commissioner General of the Tanzania Revenue Authority (TRA), the respondent, that AB G had serious plans to avoid tax.
The Tribunal found that the Board reached such conclusion relying on the fact that all the appellant’s subsidiaries in Tanzania were loss making and therefore not paying dividends to its shareholders and yet at the same time the AB G has consistently been declaring dividends.
“In the circumstances, it is fair to conclude that the respondent’s argument that the transactions were simply a design created by the appellant (AB G) aimed at tax evasion was justified,” the Tribunal declared.
According to the Tribunal, since the company’s only entities that carry on business anywhere in the world were the three Tanzanian gold-mining companies, the AB G’s only source of revenue that could create net profits retained earnings would be the three Tanzanian companies.