Tanzania: VAT liability upheld on performance grants (court decision)
Performance grants qualify as revenue subject to VAT
The Court of Appeal of Tanzania upheld a ruling that performance grants qualify as revenue subject to value added tax (VAT).
The case is: Mwenga Hydro Limited V. Commissioner General of TRA
The court found that a grant from the Rural Energy Agency was a revenue subsidy tied to electricity connection services, not a capital injection. Consequently, the VAT assessment on the grant was deemed valid, and the appeal was dismissed.
For more information, contact a KPMG tax professional in Tanzania:
Samwel Esupu | sesupu@kpmg.co.tz
Fabiola Ssebuyoya | fssebuyoya@kpmg.co.tz