A YEAR or so has happed since it was promulgated that tenants in residential or commercial buildings should withhold a portion of their rent payments before paying their landlords and remit the relevant amount to the tax authorities as withholding tax. The matter has lately been reemphasized by a city tax collection supervisor in the Kariakoo Tax Region in Dar es Salaam, obviously a good place to see how that regulation is implemented. The jury is still out, but feelings expressed by the supervisor shows the work is just starting.

Yes, it should at least begin as there is a no man’s land that has been created for that category of tax compliance, where those supposed to submit the revenue funds are discharged from their duties. Instead those they rent out those spaces are tasked in the law or in regulation to submit the taxes, and it is unclear on whose behalf. Since the rule now says tenants should submit the tax funds, it means they pay it as TRA clients like any other, even as they are paying for the landlords.

One question that didn’t appear to have been explained when the rule was first promulgated as part of budget initiatives as a salutary component of an annual Finance Act was precisely why TRA is not seeking the house owners to pay up. The sort of education we hear in that direction is the need to speed up remittance of taxes, but why it would be faster with a tenant than with the owner of the property is unclear. It is as if houses are rented by absentee landlords, but then there are all sorts of remittance mechanisms with the right addresses.

That was at the point of departure, while at the point of arrival there is an unclear question as to how far the tenant is then made factually compliant to the rule, as the mechanism by the revenue collection supervisor implicitly demands a contract between the two parties. If one submits an improper sum by citing the withholding tax aspect, and the landlord locks him or her out, TRA will take months to come to a ruling on the issue, and the courts may dismiss the case at filing.

There was one cultural addition to the comprehension of laws in 1992 when the presidential commission on the constitution delivered its report, which led to the transition to a multiparty state. The report famous as the Nyalali Report cited 40 ‘bad laws’ which ought to be removed from the statute books or extensively amended to reflect the spirit of liberty and the freedom of speech or association, right to bail, right of fair trial, etc. It is unclear if they were indeed removed or sufficiently amended, but this tenant liability law as to submitting property taxes is easy to add to the list of bad laws as too confusing.

The only aspect about it that is clear is that the owners of a building will on no account be tailed or followed by tax officials as to having remitted the tax required. Instead, the tax body doesn’t follow the tenants on whether they have paid their rents (in which case their landlord has no excuse not to have remitted the required amounts). They prefer to ask for cooperation from tenants, that they take the cue from TRA to deduce the funds and remit to TRA, unilaterally.