Tax Planning: Do You Mitigate or Avoid?
March 16, 2022

The saying that no likes paying taxes is closer to the truth than not. For companies, corporate tax is considered as a material cost which should be minimized or avoided at all. To achieve that end, tax planning comes into play. But the bad thing is, there is no clear boundary between bona fide tax planning and aggressive tax planning.

An aggressive tax planning gives rise to what is called “aggressive tax avoidance”. Aggressive tax avoidance involves the aggressive exploitation of loopholes in the tax legislation, as well as aggressive interpretation of the tax legislation in order to take advantage of the provisions of the law. The ultimate objective of tax avoidance is to avoid or minimize the tax burden.

 Although tax avoidance is not illegal in itself but it is considered as immoral.  This is why most Governments including ours (Tanzania) are taking progressive measures to eliminate loopholes in the legislation in a bid to curb aggressive tax avoidance. These measures include but not limited to adoption of the General Anti-Avoidance Rule (GAAR) and other administrative measures such as investigations, inquiries etc. In Tanzania, this is evident from the recent past incidents.  

Tax avoidance may have repercussions not only to the society but to the company as well. When aggressive tax avoidance schemes are unveiled, the company usually lands into trouble. It may land into trouble with the taxing authorities and court of public opinion. In order to avoid trouble with the taxing authorities and maintain a good corporate image, there is a need to strike a balance between the legitimate right to adopt tax reduction measures and ethics. The result of such balance would require adoption of tax mitigation measures instead of aggressive tax avoidance schemes.  Tax mitigation is encouraged while tax avoidance is not.  It goes without saying that a company needs good and effective tax planning to steer it in the right course of business.

If you feel tax planning is an issue for you and you would like to discuss this further, please call us or send an email. Our Tax Department at Victory Attorneys & Consultants in collaboration with our accounting partners would be glad to assist you

Victory Attorneys & Consultants © 2022

Augustine Dominic Shio

Managing Partner

Augustine Dominic Shio is also known as Mr Shio is a highly sought-after and widely recognized criminal law expert with more than 30 years of experience advising and assisting corporations and individuals charged with white-collar crimes.

Overview

Before founding the firm Mr Shio held several positions in the public sector, he served as a Principal State Attorney at the Attorney General’s Chambers, Legal Advisor at the President’s Office (Commission for Enforcement of the Leadership Code), Director of Legal Services and Complaints at the Ministry of Home Affairs and retired as a Deputy Director of Public Prosecutions at the Directorate of the Public Prosecutions.

Mr Shio is a recipient of the Presidential Medal for his distinctive public services and ethics of the highest order. His distinguished aptitude in handling complex criminal cases, particularly money laundering, economic and organized crimes has enabled the firm to handle high profile criminal cases in Tanzania.

Practice Focus

As the firm’s head of the Financial & Organized Crimes Department, Mr Shio represents corporations and individuals in the telecoms, media & ICT, mining, oil & gas and banking sectors in high profile criminal cases. He has advised and prepared legal compliance models and for large scale agribusiness operators, public listed companies and securities dealers and brokers in line with sector-specific laws.

He possesses vast experience in advising multinational corporations on money laundering and tax evasion throughout the life span of their commercial transactions.

Mr Shio has represented clients in major plea bargaining negotiations at the office of the Director of Public Prosecutions. He is renowned for closing some of the best pleas deals in the country on behalf of many locals and expatriates charged with money laundering, economic and organized crimes and cybercrimes. Additionally, Mr Shio consults and assists criminally charged individuals to secure pre-trail and post-trial bail on serious criminal charges.

Education

Mr Shio holds a Bachelor’s Degree (LL.B Hons) from the University of Dar es Salaam, Certificate in Criminal Justice and Treatment of Offenders from the United Nations Institute (Fuchu, Japan). He is a certified criminal law expert in Money Laundering and Terrorism.

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