ISSN 2467 4737

TIA NEWSLETTER
“Education for Efficiency” Volume 2 Number 5 June 2019
TANZANIA INSTITUTE OF ACCOUNTANCY
TIA Newsletter

A MESSAGE FROM RECTOR (CEO)

Dear readers,
Tanzania Institute of Accountancy (TIA) Newsletter is
now four years old, it has done a great job that is
worth congratulating. It has informed and reminded us
of numerous activities that were done in that period
oftime. We would like to see it continue informing us in
this period and the academic years to come. Let us
use it as a platform to not only inform us of the events
which have taken place in our Institution but also
publish short articles that will help in educating I would also like to see events taking place in our
members of our community indifferent aspects of life. campuses being covered in the Newsletter in order
I encourage each staff who is able to writearticles on to balance the scope of coverage. In order for this
their areas of expertise to do so in order to help in to happen TIA staff in those campuses need to
educating students, workers, and the general start writing; they can write either by reporting
community. issues on their environments or by writing
It is through publishing that academic life finds its educative articles that will help in portraying
essence, that is why our Newsletter has decided to
hidden values in their environments. Writing is a
provide a space for such articles, it is my sincere hope
skill, one needs to get as much exercise as possible
that TIA staff will use it effectively.
in order to become a good writer, those who are
Rector serious about becoming good writers have to use

Luciana Hembe this opportunity to gain experience and possibly

become good authors in the future. It is through
writing for minor publications such as TIA
Editorial Board Newsletter that one will acquire skills to write for

Mr. Sefu Hamisi Chief Editor more reputable publications such as international
journals.
Mr. Thomson Sanga
Graphics Designer
Mr. Englibert Haule Member Thank you

Luciana Hembe(Rector)

Photos by

Lillian Mpanju-Rugaitika

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 Volume 2 Number 5 June 2019

FOCUS ON SCHOLARY ISSUES

THE WAYS IN WHICH INTERNATIONAL OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING PRACTICES
BY Mr.Swallo C.G.C
Advanced Diploma in Accountancy (TIA); MODULE-E (NBAA); PGD-Tax Management (I.F.M); Master of Business Administration (Finance) (O.U.T);
Master of Science in Accounting and Finance (M.U), Master of Arts in Revenue Laws and Administration (Taxation) (M.U-GERMANY/UDSM/ITA)
Assistant Lecturer in Taxation and Public Finance

Tanzania Institute of Accountancy is one of the Technical States that apply this kind of tax policies do so with the intention of

Institutions in Tanzania, providing courses in Accountancy and attracting foreign deposits to strengthen their economy. Most of

other business related fields that are recognized by NACTE, the them are tiny nations with few natural or industrial resources. Their

National Council for Technical Education. Almost in all whole existence would be threatened were it not for the booming

accountancy and other business related fields there are modules financial industry growing in the shadow of foreign capital.

of public taxation, finance and economics taught at different levels Tax havens, also called offshore jurisdictions, have attracted an

of courses, the article called THE WAYS IN WHICH INTERNATIONAL increasing number of foreign investors, especially in recent decades.

OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING Usually they are people and businesses fleeing their own country’s

PRACTICESwill provide knowledge and skills to the entire tax collecting voracity in search of a more favourable business

community of TIA and other interested members in the country. environment. This is not surprising, since in some countries with

high taxes, especially in Europe, the taxes paid by a person or

INTRODUCTION
business account for up to 50% of their profit.
A tax haven is a country that exempts foreign investors who hold
What is an offshore financial centre?
bank accounts or set up companies in its territory from taxes.
Offshore financial centres are not the same as tax havens. It is
Typically, two different tax systems exist together: While citizens
unfortunate that the terms have been confused. OFCs are the
and corporations residing in the country are required to pay their
commercial communities hosted by tax havens that exploit the
taxes like elsewhere in the world, foreign investors enjoy, in most
structures that can be created using that tax havens legislation for
cases, total exemption, or at least a substantial reduction of taxes
the benefit of those residents elsewhere. In other words, the
to be paid. Provided they do not carry on business within the tax
offshore financial centre is made up of the accountants, lawyers,
haven itself.
bankers and their associated trust companies that sell services to

those who wish to exploit the mechanisms the tax haven has

created. Page 2
 FOCUS ON SCHOLARY ISSUES

THE WAYS IN WHICH INTERNATIONAL OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING PRACTICES

This means that tax havens and OFCs are very different. • Luxembourg, which is the market leader in
Most importantly,the OFC community is very largely Undertakings for Collective Investments in Transferable
expatriate (at leasti in the smaller tax havens) and is Securities (UCITS) and is believed to be the largest
usually very mobile. This characteristic makes the offshore Eurobond issuer,[ although no official statistics
OFC community quite different from the tax haven confirm this.
community,and quite often leaves them in real or
potential conflict.That is because the tax haven • New Zealand, the most remote jurisdiction, has the
community is local and committed to their geographic advantage of being a true primary jurisdiction but with
space. The OFC community is international, a tough but practical regulatory regime. It is well
transient and only interested in following money.If money positioned for the Asian market but retains close ties
does,for any reason,leave a tax haven you can be to Europe.
fairly sure that the OFC community
will follow it very rapidly.The tax haven community, • Singapore has recently risen in stature as a centre
who are the real local populace, will be left for wealth management and ranked fourth in the world
behind to tend the wreckage. in the 2009 Global Financial Centres Index. The state
The list of jurisdictions considered by the IMF to is a hub for hedge funds and its private banking
be OFCs.Many offshore financial centres are current industry is growing at a rate of 30 per cent annually.
or former British colonies or Crown Dependencies, The following prominent offshore centres now specialise
and often refer to themselves simply as offshore in certain niche markets.
jurisdictions. By some measures, there are more
countries that are offshore financial centres than • Bahamas, which has a considerable number of
not but the following jurisdictions are considered registered vessels. The Bahamas used to be the
the major destinations for offshore finance; dominant force in the offshore financial world, but fell
from favour in 1970s after independence.
• Mauritius is used for both inward and outward
investment platform for Asian, African and European • Panama, which is a significant international maritime
countries, it has the effective commercial and legal centre. Although Panama (with Bermuda) was one of
infrastructure required to support the development the earliest offshore corporate domiciles, Panama lost
of a global network. The island nation has a significance in the early 1990s.Panama is now second
number of double taxation agreements and is listed only to the British Virgin Islands in volumes of
on the OECD list of jurisdictions that have incorporation.
substantially implemented internationally agreed tax
and transparency standards.

• Bermuda, which is market leader for captive Reputation and standards of regulation vary across the
insurance, and also has a strong presence in range of offshore centres. The 2010 Global Financial Centres
offshore funds and aircraft registration.
Index (GFCI) gathers data on all International Financial
Centres and lists the following, in order, as the world's five
• British Virgin Islands, which has the largest
leading offshore finance centres: Jersey, Guernsey, Isle of
number of offshore companies.
Man, Bermuda Bermuda and Cayman Islands.In December
• Cayman Islands, which has the largest value of
2009 a group of professional services firms and businesses
Assets under management in offshore funds, and is
with offices in the GFCI's leading offshore financial centres,
also the strongest presence in the U.S. established the International Financial Centres Forum (IFC
securitisation market. Forum.

• Jersey is the most international of the British ANGLE OF FOCUS

Crown dependencies, all of which can be counted
as offshore centres. Jersey has particularly strong The ways in which international offshore financial
banking and funds management sectors and a high
centres are used in tax planning practices
concentration of professional advisers including lawyers
and fund managers.
Continuedd on
Page 9
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 Volume 2 Number 5 June 2019

FOCUS ON OUR CAMPUSES (PHOTOS)

TIA MBEYA TIA SINGIDA

TIA KIGOMA

TIA MTWARA

TIA MWANZA TIA DAR ES SALAAM

Page 4
TIA Newsletter

TIA Campuses as seen in Tanzania Map Miss Tanzania 2018 Miss Queenelizabeth receiving a certificate of appreciation from the Director
of Academic afairs Ms Luciana Hembe at a ceremony held at TIA Main Campus

Tia Students enjoying in our spacious computer Laboratory Tia Students in Library

TIA 2018 Convocation Participants Page 5

 Volume 2 Number 4 June 2019

STUDENTS ACTIVITIES 2018-2019

TIA students attending a computer class Miss Tanzania 2018 Ms Queenelizabeth Makune acknowleding enterpreneurship
activities done by her fellow students at TIA main Campus
Students Participating in TIA 2018 Convocation

Page 6
 TIA Newsletter

TIA PAVILIONS AT JAMUHURI STADIUM DODOMA(NACTE)SABASABA,TCU AND NANENANE

GROUNDS ATTRACT MANY STAKEHOLDERS
By Our Reporter

It is a custom for TIA to exhibhit

its activities to its potential
customers at the trade fairs
conducted within the country. This
year it had a pavilion at NACTE
exhibhition held in
Dodoma,Mwalimu Nyerere
International Trade Fair conducted
at Sabasaba Grounds along Kilwa
Road from 28th June to 13th July,
2018. The trade fair as the name
refers, is an international event Minister of Education ,Science and Technology Hon.Prof Joyce Ndalichako at TIA Pavillion on
NACTE exhibhition held in Dodoma in may 2019.
which attracts both local and
international organisations from
different countries of the world to
display their products and services.
TIA also participated in the
Nanenane exhibitions held in Mbeya
from 29th to 10th August 2018.
Nanenane (a Kiswahili phrase)
which is loosely translated as an
agricultural trade fair which takes
place in some regions in the
country where farmers and other
agricultural stakeholders such as
universities and research institutes,
fertilizer producing industries (also
known
Students at our stand at TCU exhibhition 2018

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 Volume 2 Number 5 June 2019

TIA PAVILIONS AT JAMUHURI STADIUM DODOMA(NACTE)SABASABA,TCU AND NANENANE

GROUNDS ATTRACT MANY STAKEHOLDERS
as input suppliers) display the new
technologies, ideas, discoveries and
alternative solutions concerning the
agricultural sector. This is also a
chance for government and private
firms to present their services and
activities to the public. The TIA
pavilions at both Sabasaba, TCU and
Nanenane Exhibitions attracted
many visitors who attended the
events most of whom were
students, government dignitaries,
some officials from private and Our Esteemed visitors at TIA TCU 2018 Exbhitions Pavilion
public sectors, normal citizens and
foreigners from various sectors
most of whom seemed very much
attracted by TIA programmes of
study. Brochures, leaflets and
booklets containing activities and
courses run by TIA became very
valuable items in both exhibitions.
Participation of TIA at such events
helps in advertising the Institute to
various stakeholders such as pupils,
students, parents, guardians and
other potential sponsors expected
to be sponsors of students in the
future.

A visitor at our NACTE exhibhition 2019 at Jamuhuri Stadium Dodoma.

Page 8
 TIA Newsletter
1.GENERAL APPROACH
Some of the Committee’s witnesses highlighted the use of
aggressive tax planning strategies by multinational
corporations. The multinational corporations use bank
accounts in offshore financial centres to transfer money to
other parts of the world, and that they use tax avoidance
techniques to remain competitive with corporations that
use similar techniques. The OECD noted that multinational
corporations use tax havens and offshore financial centres
due to relatively lower regulatory standards. It provided
the example of an insurance company created by a U.S.
parent corporation in an offshore financial centre to
provide insurance services solely to the parent
corporation, as well as to its U.S. and foreign subsidiaries.
Accountability Research Corporation indicated that the
new International Financial Reporting Standards legitimize
the under-reporting of income by publicly traded
corporations for tax purposes. It highlighted the adoption
of the these standards by the CRA without debate in
Canada, as well as the drafting and approval of these
standards by organizations interested in maximizing
investment returns for their clients, which may lead to
aggressive tax planning and decreased tax revenue in the
future.
Brigitte Alepin, a chartered accountant with Agora Services
de Fiscalité Inc. who appeared on her own behalf, argued
for a balance between, on one hand, restricting certain
transactions due to tax evasion committed in tax havens
by individuals, corporations and trusts and, on the other
hand, legitimate tax planning transactions in the same
jurisdictions by multinational corporations.
A Department of Finance official noted that Bill C-48, An
Act to amend the Income Tax Act, the Excise Tax Act, the
Federal-Provincial Fiscal Arrangements Act, the First
Nations Goods and Services Tax Act and related legislation,
contains measures that would limit the use of foreign
investment entities, non-resident trusts and foreign tax
credit generators to avoid and reduce the taxation of
income in Canada.
2. CAPITAL FLIGHT
This capital flight, of course, is not viewed favourably by
tax officials of the countries that suffer from it, as in the
end an important part of their tax revenue gets away.
Therefore, they have tried to react with different measures
to hinder the transfer of assets to tax havens or to make it
unattractive.But the new world order that emerged with
the globalization of the economy makes it difficult to exert
effective control over the movement of money. Trying to
hinder the free flow of capital clashes with the claims of
global trade liberalization, which is defended by, besides
most companies and governments, also by such important
institutions as the World Bank,
Volume 2 Number 5 June 2019
the WTO (World Trade Organization) and the OECD (Organization for
Economic Co-operation and Development).
Another common reason for resorting to foreign banks is the pursuit
of financial stability. People living in countries with high inflation,
with a weak national currency or in a politically, socially and
economically unstable setting, often seek shelter for their savings in
a reliable international financial centre. Many individuals and
companies transfer capital to tax havens to benefit from the tax
advantages they offer and enjoy a higher level of privacy.
3.FOREIGN BANKS
It is precisely in tax havens, and to a smaller degree in other major
financial centers, where we find a particular type of foreign banks,
which are known as offshore banks. Such banks are targeted to
citizens and non-resident companies and are regulated by special
offshore banking laws. These do not only remove most of the
limitations imposed on traditional banks, such as exchange controls
and on foreign transactions, but they also exempt both the deposited
capital and the corresponding interests from tax.
The other banks, including both those in the country of residence as
well as traditional foreign banks, are not covered by these special
laws, therefore we may define them as onshore banks. As for the
different types of banks that exist (whether they are onshore or
offshore institutions), we could classify them by line of business.
Thus we have:
Central Banks: They issue the national currencies of the different
countries and define their monetary policies.
Correspondent banks. They are banks that provide services to other
banks within a country. The intervention of correspondent banks is
very common in international transfers, especially when changes of
currency are made.
Investment Banks: They operate in the stock and financial
markets. They are basically engaged in the sale of shares, the
management of mutual funds and the search of finance for large
companies. Within this group we can find the so-called private banks,
focussed on people with large financial resources, offering them a
more personalized service. Many offshore banks are in fact private
banks.
Corporate or Business Banks: They specialize in medium and
large companies to which they provide services related to trade such
as loans, letters of credit, etc...
Commercial or retail banks. They are the “regular” banks we all use
and whose main customers are individuals and small businesses.
Opening current and savings accounts, writing checks, granting
mortgage loans and consumer credit, and so on, are among their
most common services.
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THE WAYS IN WHICH INTERNATIONAL OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING PRACTICES
Savings Banks:They operate the same way as regular
retail banks, but usually dedicate their profits to charitable
causes. Many have public capital or have originated from
foundations established by people committed to good
causes. They are very popular in Europe.
Postal Banks:They operate in a similar way to savings
banks, but they depend on the postal service. In some
countries such as Switzerland, they are eligible under
specific legislation and they are very creditworthy
institutions.
Ethical Banks:They are created by individuals and
institutions critical of the financial and monetary system.
One of the highlights is that they invest in ethical and
environmentally defensible projects.
Islamic Banks: These are institutions created to meet
Islamic law (sharia), which prohibits operations such as the
payment and collection of interest, considering the
practice as usury.
Finally, we must not forget a host of licensed institutions
that perform similar activities to banks but do not need a
full banking license to practice. They are usually private
cooperatives, seeking to provide better conditions for its
members. The best known are the so called Building
Societies, especially focused on mortgages, or the Credit
Unions.
Note that the classification we have made should not be
taken strictly. Many banks perform different functions and
it is not uncommon to find institutions that offer
commercial services to individuals, but also corporations,
operating as investment or correspondent banks, and so
on. They are the large financial groups which often
combine these different activities because they have
specialized departments for each type of service.
In conclusion I can say that foreign banks, especially
offshore banks, offer many interesting opportunities for
investment and savings. The possibilities of each person
and the benefits they can get will depend, to a greater
extent, on their financial capacity, their place of residence
and the type of institution chosen for this purpose.
4. PROFIT SHIFTING AND TRANSFER PRICING
Regarding the use of transfer pricing, the CRA informed
the Committee that transfer pricing occurs in all sectors,
and is used by both large and small corporations. Global
Financial Integrity noted that transfer pricing is used by
multinational corporations to under-report income in
developing countries, thereby lowering the tax base of
those countries.
Volume 2 Number 5 June 2019
As an example of this approach, the Halifax Initiative mentioned
international mining companies operating in Zambia that have
allegedly unprofitable affiliates in that country. To reduce the
shifting of profits, Global Financial Integrity and the Halifax Initiative
advocated country-by-country reporting of sales, profits, tax paid,
the number of employees and costs for all multinational
corporations. Similarly, Brigitte Alepin and Arthur Cockfield
proposed that country-specific information be submitted to the CRA
in order to reduce tax avoidance by multinational corporations.
5. DOUBLE TAXATION TREATIES
A number of the Committee’s witnesses indicated that bilateral tax
treaties designed to reduce the double taxation of income or double
taxation treaties actually promote tax avoidance and evasion by
Canadian corporations. Alain Deneault, a researcher at the
University of Quebec at Montreal who appeared on his own behalf,
provided the example of the Canada–Barbados double taxation
treaty, which he felt promotes the reporting of higher expenses by
multinational corporations in Canada through inflated prices for
intra-firm transactions, thereby lowering Canadian taxable income.
The Quebec Association for the Taxation of Financial Transactions
for the Aid of Citizens had similar views on the Canada–Barbados
double taxation treaty, and said that the treaty enables profit
shifting and reduces the amount of Canadian tax revenue.
6. INSURANCE
A number of offshore jurisdictions promote the
incorporation of captive insurance companies within the
jurisdiction to allow the sponsor to manage risk. In more
sophisticated offshore insurance markets, onshore
insurance companies can also establish an offshore
subsidiary in the jurisdiction to reinsure certain risks
underwritten by the onshore parent, and thereby reduce
overall reserve and capital requirements. Onshore
reinsurance companies may also incorporate an offshore
subsidiary to reinsure catastrophic risks.
7.COLLECTIVE INVESTMENT VEHICLES
Many offshore jurisdictions specialise in the formation of collective
investment schemes, or mutual funds. The market leader is the
Cayman Islands, estimated to house about 75% of world’s hedge
funds and nearly half the industry's estimated $1.1 trillion of assets
under management, followed by Bermuda, although a market shift
has meant that a number of hedge funds are now formed in the
British Virgin Islands. As at year end 2005, there were 7,106 hedge
funds registered in the Cayman Islands, 2,372 hedge funds in the
British Virgin Islands and 1,182 in Bermuda. These figures do not
include other collective investment vehicles. See also the recent
survey by Deloitte in Hedgeweek.
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 TIA Newsletter Volume 2 Number 5 June 2019

THE WAYS IN WHICH INTERNATIONAL OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING PRACTICES

8. USE OF DERIVATIVES INSTRUMENTS

First, the corporation enters into an employment agreement
The Use of Derivatives in Tax Planning provides with the entertainer, who agrees to provide his personal
insightful and in-depth coverage of timely services to the corporation in exchange for a fixed or
issues including: tax treatments of notional contingent salary which, since earned in an employer-
principal contracts, taxation of credit employee relationship,' will be subject to customary
withholding and other employment taxes.
derivatives, derivative tax planning applications
for fixed income instruments, using derivatives In order to assure the promoter, producer and others that they
to shift income, enhancing after tax returns, can obtain exclusive rights from the corporation, the
working with the straddle rules of tax code employment agreement should require the entertainer to
sections 1092 and 263(g), derivatives in the furnish his services within a particular medium exclusively to his
loan-out corporation.
charitable world, using OTC equity derivatives
for high-net-worth individuals, corporate Second, once the corporation is assured of receiving the
applications of derivatives, synthetic benefit of the entertainer's personal services within a
exchangeables and convertibles, and structures particular medium, it will contract with promoters,
and selected tax issues.The use of derivative producers and others to furnish (or loan) the services of
the entertainer. This agreement will establish an independent
financial instruments in the past decade has
contractor's relationship between the corporation and the
made it flexible and efficient for firms to producer or promoter, so the amounts payable will not be
manage taxation. Derivative financial subject to withholding and other employment taxes
instruments can affect taxes by altering the customarily retained from payments made to employees. Tax
timing and character of reported income benefits of a loan-out corporation An entertainer will
employ a loan-out corporation principally to defer the
subject to tax. In this thesis, we set up a
recognition of income for tax purposes. Income deferral is
theoretical framework to show how firms important for entertainers because their career spans, particularly
exploit tax-timing and tax character options to the periods of high demand and high earnings, may be very
enhance firm market value. Firms exploit tax- short, and the advantages provided by income averaging 4
timing options when they realize losses may not adequately reduce the tax rate applicable to
the entertainer's earnings. Income deferral and reduction of
immediately but defer gains indefinitely. They
the tax rate can be accomplished by a variety of techniques.
exploit tax-character options when they realize
losses as ordinary losses rather than capital 10. FIXED DEPOSITS AND BONDS
losses. Firms c m exploit both tax-timing and The idea of investing in Fixed Interest investment options has
tax-character options by using derivative always been highly popular among Indian investors, with as much as
financial instruments. 60% of the savings being diverted into Bank Fixed Deposits.
However with increasing inflation and low rates on Bank Fixed
Deposits, investors seek Fixed Deposits with better yields and safety
9. LOAN-OUT CORPORATION of their hard earned savings. This is where the Corporate Fixed
A true loan-out corporation provides one product to Deposits find its existence & preference over other asset classes.
the public: the personal services of the particular
entertainer. The corporation may also function in Corporate Fixed Deposits are the deposits placed by investors
other capacities, such as providing production directly with the company for a specified term carrying a specified
facilities, creating a produced film, or licensing or rate of interest. These deposits offer a higher rate of interest as
selling a published work. However for purposes of compared to bank fixed deposits & are targeted at conservative set
this article, it will be assumed that the loan-out of investors with low risk appetite who do not wish to be disturbed
corporation solely provides the personal services by unpredictable market movements. Corporate Fixed Deposits rest
of an entertainer. The loan-out arrangement on the strength of twin benefits of returns & protection.
involves two primary contractual relationships.

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THE WAYS IN WHICH INTERNATIONAL OFFSHORE FINANCIAL CENTRES ARE USED IN TAX PLANNING PRACTICES
Bonds are among the highly popular investment options
under debt as an asset class. Simply put, bond is a debt
investment under which investors gives money to the
issuer for a pre-defined period at a specified rate of
interest. This implies that the investor has given a loan to
the issuing entity, and will be repaid at the end of the
specified tenure. Bonds or Debentures are generally
issued by corporates, government for the purpose of
raising money to fund their activities & projects. Bonds
provide corporates & governments an alternate channel
to meet their fund requirement. The tax implications of
bonds defer depending on the type of Bonds, however
these bonds are exempt from Wealth Tax under Wealth
Tax Act, 1957. There are various classifications of bonds/
debentures. The types of bonds/debentures from the
investor's perspective are listed below:
CONCLUSION
The world’s financial centres are undergoing rapid
changes to accommodate the demands of an increasingly
integrated global economy. The G7 countries are driving
such changes through their continued support for the
actions of several supranational agencies, particularly the
Organisation for Economic Co-operation and
Development, the Financial Action Task Force and the
Financial Stability Forum.
Initiatives launched by these agencies foreshadow
changes in the legislative and regulatory infrastructure of
all international financial centres, particularly the so-
called “tax haven” or “offshore” centres.
The success of the offshore world has led to scrutiny of
such centres by onshore governments and their agencies.
Explicit expressions of competitive concerns about
“harmful tax” régimes have muted recently, but onshore
governments remain apprehensive that the high levels of
confidentiality traditionally available offshore invite illicit
activity. The articulated rationales for change include the
perceived needs to
(i) counter money laundering,
(ii) promote transparency to enhance onshore tax
enforcement, and
(iii) improve regulation in all international financial
centres to limit global financial risks.
The debate over changing standards was conducted at
the outset by lobbing bombs over the fence, particularly
between the OECD Committee on Fiscal Affairs and the
so-called “tax havens”. However face-to-face dialogue
between parties has softened negotiating positions and
promoted better understanding of mutual interests.
Accordingly, while the offshore centres remain
committed to a robust defence of legitimate national
interests, the current tone of discussions is increasingly
constructive.
Volume 2 Number 5 June 2019
References
1)Natarajan, Mangai (2010-11-15). International Crime and Justice. Cambridge
University Press. ISBN 9781139492379.
2)https://www.irs.gov/uac/Offshore-Tax-Avoidance-and-IRS-Compliance-
Efforts
3)Unger, Brigitte (2014-01-01). Bruinsma, Gerben; Weisburd, David, eds.
Money Laundering. Springer New York. pp. 3137–3144. ISBN 9781461456896.
4)In other countries no difference so long as you are resident and domiciled
there (for example, the United Kingdom)
5)"Havens for Tax Evasion". The New York Times. 2008-03-11. Retrieved
2012-02-20.
6)"Banking Statistics (Cayman)". Cayman Islands Monetary Authority.
Retrieved 20 October 2014.
7)Trust Law in Wealth Management and Estate Planning, p.429
8)"The Panama Papers". Panama Papers Website.
9)The Guardian (UK), 21 July 2012, "£13tn: Hoard Hidden from Taxman by
Global Elite,"http://www.guardian.co.uk/business/2012/jul/21/global-elite-
tax-offshore-economy
10)"Open a bank account in Switzerland". BankIntroductions.com. Retrieved
2012-02-20.
11)"Are Private Foreign Assets Fleeing From Switzerland?".
MyPrivateBanking.com. Retrieved 2012-02-20.
12)"Isle of Man Depositors' Compensation Scheme". Dcs.im. Retrieved
2012-02-20.
13)"Kaupthing Singer & Friedlander (Isle of Man) Limited (In Liquidation)".
Kaupthingsingers.co.im. Retrieved 2012-02-20.
14)"FSC - Depositors' Compensation Scheme - Financial Supervision
Commission". Gov.im. Retrieved 2012-02-20.
15)"Business | Icelandic bank savers bailed out". BBC News. 2008-10-08.
Retrieved 2012-02-20.
16)Joseph Stiglitz (2008-10-22). "A crisis of confidence - Letting financial
markets run wild was risky business indeed. Transparency, oversight and fair
competition are needed now". The Guardian. Retrieved 2008-11-24.
17)"Important things You Must Learn about Offshore Banking". World News.
2017-05-27. Retrieved 2017-09-06.
18)"Fighting tax evasion: EU and Switzerland sign historic tax transparency
agreement". Archived from the original on 7 September 2015.
19)"Tax Wealth Not Work". Retrieved 8 July 2016.
20)"Foreign Account Tax Compliance Act". www.irs.gov. Retrieved
2016-02-23.
21)Victor Thuronyi 2016 Tax law design & drafting (v. 1 & 2) 1st edition
Page 12
TIA Newsletter Volume 2 Number 5 June 2019

FOCUS ON SCHOLARY ISSUES

ECONOMIC BENEFIT OF SAVINGS AND CREDIT COOPERATIVE SOCIETIES ON THE WELL-BEING OF

THE INDIVIDUAL: EVIDENCE FROM MBEYA DISTRICT, TANZANIA

Dr Kasambala M.
BSc. Agric. General, MSc. Agric. Economics and PhD in Economics.
Tanzania Institute of Accountancy (TIA), P. o. Box 9522, Dar es salaam, Tanzania.
Email:irenekasambala@yahoo.com

Abstract
Savings and Credit Cooperative Societies
(SACCOS) are registered organization that are
formed to impart a saving spirit and extend
loans to the members based on individual
requirement and society rules and regulations in
relation to their savings. They are societies that
mobilize savings and speed up investment by
allowing its members to access loans and invest
for income generation and thereby contributing
to poverty reduction. The poor living condition
of the people is associated with little or
inadequate capital for investment purposes. This
paper investigates the economic benefits of
SACCOS on the well-being of the individual. The
study used regression analysis and descriptive
statistics, where collected information were
analyzed using ordinary least square (OLS)
regression, cross tabulation and independent t-
test. In the independent t-test means of the
investment capitals for both SACCOS members
and non-members were compared. The results
indicate that means of the investment capital
employed in the business enterprises are not the
same between SACCOS members and non
members. The average investment capital was
higher for members and lower for non members.
The results from t-test were supported by Eta
squared estimates that shows the magnitude of
the effect of investment capital on the business
enterprises of both SACCOS members and non-
members.
Whereas the results from the cross tabulation reveals
that SACCOS members possess a significant higher
amount of properties as compared to non-members.
The findings from the regression analysis concluded
that SACCOS members own more assets due to
acquisition of credit and thus stands in a better
position for accumulation of wealth than the non-
members. The study recommends that more people
should join in SACCOS in order to save in a pool and
access loans at low cost and with little or no collateral
at all for investment and hence reducing poverty and
improves their well-being. As a policy implication the
study calls for the formation of more SACCOS where
people can acquire capital for investment purposes
and thereby contributing to industrial economy; which
is the focus of the Nation of Tanzania today.
Keywords:
SACCOS, Economic benefits, well-being of SACCOS
members, investment capital
Page 13
 Volume 2 Number 5 June 2019

FOCUS ON SCHOLARLY ARTICLES

MODELING STOCK MARKET VOLATILITY USING

GARCH MODELS CASE STUDY OF DAR ES SALAAM
STOCK EXCHANGE (DSE)
Mutaju Marobhe
Tanzania Institute of Accountancy(TIA)
mutajulee@gmail.com
Presented at: SIBR 2019 (Seoul) Conference on
Interdisciplinary Business and Economics Research,
20th-21st April 2019, Seoul, Korea.
Abstract
This study was carried out to model volatility of stock returns at Dar es Salaam
Stock Exchange (DSE) using daily closing stock price indices from 2nd January
2012 to 22nd November 2018. Modeling was done using both symmetrical
and asymmetrical generalized auto regressive Heteroskedastic model (GARCH)
models; These were GARCH (1,1), E-GARCH (1,1) and P-GARCH (1,1). The
findings showed that all three (3) models were significant to forecast stock
returns volatility at DSE. GARCH (1,1) and P-GARCH (1,1) both revealed that
the magnitude of shocks in volatility is higher with good news as opposed to
bad news. E-GARCH model (1,1) showed the evidence of leverage effect
associated with the stock returns which can be detrimental to the trading
companies’ capital structures. P-GARCH (1,1) was found to be more accurate
to in predicting stock returns based on both the Root Mean Squares Error
(RMSE) and Theil Inequality Coefficient (TIC).

Page 14
TIA Newsletter Volume 2 Number 5 June 2019

TIA NEW STAFFS

For the year 2018-2019 Tanzania Institute of Accountancy has employed new academic and non
academic staffs.Also TIA has receive some staffs from other government offices who joined the team.

Jackson Payowela Phinias Bita Anyigulile Boyd

TIA-SINGIDA TIA-SINGIDA TIA-MBEYA

Christina Mneney Gloria Nguve Maariam Zaar

TIA-DSM TIA-DSM TIA-DSM

Ramadhani Zuberi Claudio Kikonde

Eliachi Kyara
TIA-MBEYA TIA-KIGOMA
TIA-SINGIDA

Page 15
 TIA NEW STAFFS

Oscar Lova Suma Mwankemwa Jackson Payowela

TIA-MTWARA TIA-DSM TIA-SINGIDA

Page 16
Tanzania Institute of Accountancy (TIA) Newsletter

ACADEMIC PROGRAMMES AT TANZANIA INSTITUTE OF ACCOUNTANCY (TIA)

CERTIFICATE PROGRAMMES (1 YEAR)

Basic Technician Certificate in Accountancy (BTCA) -All Campuses

Basic Technician Certificate in Procurement and Logistics Management (BTCPLM) -All Campuses

Basic Technician Certificate in Business Administration (BTCBA)-Dar es Salaam,Singida and Mtwara

Basic Technician Certificate in Human Resource Management (BTCHRM)-Dar es Salaam,Singida and Mtwara

Basic Technician Certificate in Marketing and Public Relations (BTCMPR)-Dar es Salaam and Mbeya

Basic Technician Certificate in Public Sector Accounting and Finance (BTCPSAF)-Dar es Salaam annd Mbeya

DIPLOMA PROGRAMMES (2 YEARS)

Diploma in Accountancy (DA) -All Campuses

Diploma in Procurement and Logistics Management (DPLM)-All Campuses

Diploma in Business Administration (DBA) -Dar es Salaam,Singida and Mtwara

Diploma in Human Resource Management (DHRM) -Dar es Salaam,Singida and Mtwara

Diploma in Marketing and Public Relations (DMPR) -Dar es Salaam and Mbeya

Diploma in Public Sector Accounting and Finance (DPSAF)-Dar es Salaam and Mbeya

BACHELOR DEGREE PROGRAMMES (3 YEARS)

Bachelor of Accountancy (BAC) -Dar es Salaam,Mbeya,Singida and Mwanza

Bachelor of Procurement and Logistics Management (BPLM) -Dar es Salaam,Mbeya,Singida and Mwanza

Bachelor of Business Administration (BBA)-Dar es Salaam and Singida

Bachelor of Human Resource Management (BHRM) -Dar es Salaam and Singida

Bachelor of Marketing and Public Relations (BMPR)-Dar es Salaam and Mbeya

Bachelor of Public Sector Accounting and Finance (BPSAF) -Dar es Salaam and Mbeya

POSTGRADUATE DIPLOMA PROGRAMMES (1 YEAR)

Postgraduate Diploma in Accountancy (PGDA) -Dsm,Mbeya and Singida

Postgraduate Diploma in Procurement and Logistics Management (PGDPLM) -Dsm,Mbeya and Singida

Mbeya Campus Singida Campus Mtwara Campus Mwanza Campus Kigoma Campus

Airport/Zambia Junction Along Sepuka Road At the Saba-Saba Grounds Nyakato Area (Buzuruga) Ujiji (Red Cross Building)

P.O. Box 825, Mbeya P.O. Box 388, Singida P.O. Box 169, Mtwara P.O. Box 5247, Mwanza P.O. Box 526, Kigoma

Tel. 255-025-2502276 Tel. 255-026-2502125 Tel. 255-023-2333948 Tel. 255-028-2570475 Tel. 255-028-2803529

Email: tiambeya@tia.ac.tz Email: tiasingida@tia.ac.tz Email: tiamtwara@tia.ac.tz Email: tiamwanza@tia.ac.tz Email: tiakigoma@tia.ac.tz

Chief Executive Officer

Tanzania Institute of Accountancy

P.O. Box 9522, Dar Es Salaam

Tel: +255 22 2850717, Fax: +255 736 502630 Email: tia@tia.ac.tz

Website: www.tia.ac.tz