By ADAM IHUCHA
Tanzania is mulling over enacting a stringent customs
law, to curb a thriving customs fraud, in its fresh thrust to seal off avenues,
for revenue leakages.
Experts say, customs fraud in Tanzania occurs in
various forms, including under-declaration of the goods’ value and imported products
misclassification in order to underpay taxes.
Taxman says, in whatever form, the customs fraud, has
significant economic consequences for Tanzania, where the revenue base, is
highly dependent upon the efficient taxation of trade.
“In the new law, under-declaration of the goods’
value, falsification of import products, would be considered as the customs
fraud offence,” says TRA Commissioner of Customs and Excise, Mr Tiagi Kabisi.
Mr Kabisi told the East African Business Council
(EABC) breakfast meeting recently in Dar es Salaam that, Tanzania would borrow
a leaf from Singapore, where customs fraud, is a criminal offence.
At the moment, customs cheating in Tanzania is treated
lightly, as the culprits are not prosecuted in court of law, though they are
liable to a fine of $10,000 or license nullification.
TRA Senior Customs officer, Mr Bahati Allex says that
once the law is enacted, the customs fraud perpetrators would be prosecuted as any
other serious criminals.
“Apart from prosecution, their imported goods also
would be confiscated and their license nullified” Mr Allex explains.
Taxman says, of late, unscrupulous traders have been
taking advantage of a pre-arrival declaration (PAD) system, by declaring false
value of goods or misclassification of products, in a bid to underpay duties.
The proliferation of customs fraud had compelled minister
of finance, William Mgimwa to ban the direct cargo discharge.
“As a result, since June 2013, all cargos have been
subjected to 100 percent physical verification to attest quantities and value
of cargo declared by importers” Mr Allex said.
Dr Mgimwa’s ban at Dar es Salaam port came after the
state unearthed a mafia-like syndicate involving importers, clearing agents and
foreign dealers to commit customs fraud.
The minister says, the culprits have hatched a plan
through which, they work in coalition to forge consignment documents, precisely
to lower, the product-purchasing price, in a bid to avoid taxes.
Taking advantage of both online pre-arrival
declaration and direct cargo release, the syndicate is believed to have been
ripped-off the country, a much needed resources.
For instance, recently, TRA through physical cargo
verification at the Dar harbor was intercepted nearly 200 containers loaded with
different products to what was on the pre-arrival declaration form.
In the PAD forms, the importers declared that the
containers were loaded computer CPUs, mosquito nets, computers, solar panels,
and aluminum products, which were tax-free.
But after being verified, there were taxable items
such as khanga, and electronics gadgets like sterilizers, saloon driers, TV
sets, radio, rice cookers, blenders and micro-waves.
As of last week, TRA was still struggling to establish
tax due, after having successfully managed to fine importers Tsh 1.2billion or $750,000.
Dr Mgimwa believes that if measures were taken to
plug in loopholes for customs fraud, TRA could collect Tsh 1 trillion or $625
million a month, up from the current Tsh 791.67 billion or $494.791 million.
In the next five years, TRA projects revenue
collection would soar to 19.9 per cent of GDP, thanks to authority’s fourth
corporate blueprint covering 2013/14 – 2017/2018.
In real terms, the plan shows, TRA would be able to
collect nearly Tsh19 trillion or $11.875 billion, a year by 2017/18, up from
Tsh 8.03 trillion or $5.019 billion in the just ended fiscal year.
The outline shows that the
target will be realized by improving efficiency in tax administration and broadening
the tax net in order to collect more revenue particularly from lucrative sectors
of mining, oil and gas, telecommunication, tourism, construction, real estate,
financial industry, high net worth individuals and incomes from the informal
sector.
The EABC Trade Economist, Mr Adrian Njau says that
the certification of clearing and forwarding agents within the EAC could be an
effective measure to reduce customs fraud.
“Once the clearing agents mess-up in Tanzania, for instance,
his or her license should be revoked and barred to operate in any EAC partner
states for life” Mr Njau said.
However, effectively from January 2014, the EAC
freight forwarders association would start certifying clearing and forwarding
companies across the region, on behalf of partner states revenue authorities.
FEAFFA Executive Director, John Mathenge said in an
earlier interview that all clearing and forwarding companies would be required to have at least two
professionals in order to acquire licenses.
The move is meant to nurture professionalism in the
freight and logistic industry in the EA trading bloc, home to 2,431 firms.
At the moment, clearing and forwarding operators in the EA region are not required to have any formal qualifications.
Now, Mr Mathenge said the East Africa Customs Freight forwarding Practicing Certificate (EACFFPC) would be mandatory requirement.
It is understood that FEAFFA has given the green light by the EAC partner states revenue authorities to be the sole regional apex body to certify the companies qualified for licenses from 2014.
At the moment, clearing and forwarding operators in the EA region are not required to have any formal qualifications.
Now, Mr Mathenge said the East Africa Customs Freight forwarding Practicing Certificate (EACFFPC) would be mandatory requirement.
It is understood that FEAFFA has given the green light by the EAC partner states revenue authorities to be the sole regional apex body to certify the companies qualified for licenses from 2014.
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