TRA Set To Curb Systemic Corruption

Large tax defaulters could be now heading for trouble as the Tanzania Revenue Authority ups its gear to fight corruption and tax evasion.

untitled3 b32M5 16298

The donor’s decision to slash 220 million US dollars (308 bn/-) in budget support to Tanzania could have suddenly woken up the TRA to face the glaring reality and urgency needed in generating more domestic revenue for the government to run its business.

Since 2006 the domestic revenue collection has increased from Tsh2.1 trillions to 4.6 trillion in 2009/10 but this is still far below the amount required to meet Tanzania’s budget needs.

The TRA hopes to plug in the gap caused by the 308bln deficit by tapping into revenues lost through corruption and evasion by its own unfaithful staff and unscrupulous businessmen and women. TRA has consistently failed to meet its revenue collection targets, leaving government to dangle at the mercy of donors to finance its budget.

A joint commission from the Prevention and Combating of Corruption Bureau (PCCB) and the Tanzania Private Sector Foundation (TPSF) which visited the TRA recently, has already lauded the Authority over its move.

The commission was formed to make follow up on congestion problems at the Dar es Salaam port that has affected business quite considerably.

During the consultative meeting held with different stakeholders at the Ubungo plaza recently the joint presented its visit findings on the agreed matrix showing TRA had done substantially addressed the loopholes identified to curb corruption at the Dar es Salaam port. The committee however reported that the Ministry of Infrastructure and Development was still reluctant in implementing most of the issues it agreed to review and rectify.

One of the strategy that TRA has implemented was the automation of all customs processes from import declaration form-IDF to Cargo Release Office-CRO and the modernization of the ASYCUDA++system. Although the implementation is ongoing, already the ASYCUDA++ is in place and used by all clearing and forwarding companies at the Port of Dar es salaam.

A similar task of implementing ASYCUDA++ at all border points that was to be installed by the Ministry of Infrastructure and Development was found to be sluggish as it was not yet installed at Mozambique and Zambian borders.

The ASYCUDA++ system which was first introduced at the Mwalimu Julius Nyerere International Airport way back in 2005 and was already in use by more than ten countries in East and Southern Africa at that time, is an online electronic system that aims at re-engineering customs clearance procedures for consignments with Freight on Board (FOB) amount below US$ 5,000.00 which are pre-lodged electronically through ASYCUDA++ and then all relevant documents are uploaded in Asy-Scan to TRA for valuation made by TRA officer's.

Under this system, payment of assessed duties and taxes will be made through the banks with direct connection to the ASYCUDA++ system which currently include; Twiga Bancorp and Citibank. Consignments with FOB amount above US$ 5000.00 and full container load usually pass through TISCAN.

Talking to Jeremiah Lyimo, an employee of Tan Traffic Company a Clearing and Forwarding agent said that the ASYCUDA system despite its not being user friendly, the system had cut down corruption transaction between clearing agents and TRA personnel and also increased efficiency in payment of custom duties.

“Before this system, things used to be done manually creating a loophole for corruption as the agents could negotiate with TRA officials on devaluing imports and exports” he said. “Not only could the TRA officials connive with clearing agents but also agents could further alter TRA documents on valuation as they were hand written.”

Other commendable reviews that were implemented by TRA include, the removal of the exemption on deemed capital goods to investors registered after 1st July 2009, full review of the entire Customs clearance process, setting measures towards ensuring anonymity of valuation clerks as exposing them to clearing agents is a den of corruption and lastly ensuring random distribution of valuation documents through improved automation so as to avoid tempering with the valuation process by TRA officials.

The sad stories from the joint committee fell largely on the Ministry of Infrastructure and Development-MoID’s failure to reduce the over 40 road blocks which have been cited countless times as beacons of corruption.

For example, it was revealed that, what is termed as petty corruption on the Dar es salaam-Tunduma road is no longer petty as it has turned to be multi million shillings sucking leach engulfing a some TZS 565,000 from every truck that moves from or to Tunduma as one is forced to illegally pay a minimum of TZS 5,000 to every 113 times they are usually stopped by traffic police.

Another sad story was from Tanzania Ports Authority-TPA not putting in place an Integrity Committee as stipulated in the second phase of the National Anti-corruption Strategy and Action Plan-NACSAPII. Such reluctance leaves TPA administration questionable as to whether they are really serious to curb corruption at the port or they are the perpetrator and beneficiaries of the same and so PCCB’s spotlight should be on the lookout.

Moreover, on being requested for an explanation as to why they still do not have the Integrity Committee in place, TPA replied that at that time they were entirely busy with port decongestion. This does not really make sense as it seems that they are trying to uproot a problem while leaving its core cause in place.

Recent developments from TRA have revealed that, TRA Tanzania’s tax collectors are twice keen in controlling corruption through their Internal Affairs Unit which with the help of the already in place six-member Management Ethics Committee . These departments are strict in enforcing TRAs anticorruption policy.

Presenting her paper at the 16th TRA stakeholders’ forum, Mrs. Meela Cosmas the TRA Manager for Internal Affairs Unit said that, the Anticorruption Policy applies to both appointed members of the Board of Directors, management and TRA staff and other external stakeholders.

While showing the successes of the Unit she oversees, Mrs. Cosmas positively bragged that since the establishment of the Unit, hardly two years now, they have been able to conduct 39 internal investigations and that in such instances, where enough evidence or suspicion that corruption was committed is proven then such cases are usually handed over to PCCB and other law enforcement agents.

Revealing areas prone to corruption in TRA, Mrs. Cosmas said that, corruption is mainly bred in areas they technically refer to as “Corruption Risk Areas,” these according to her are first, highly concentrated in the; financial management system and procedures, customs clearance processes, objections settlement and second less prone areas include; refund processing, auctions, procurement, records management and lastly human resource management which has been wrongfully thought of as the first and most corrupt sector by the public due to the fact that nepotism is the much obvious form of corruption in TRA.

Mrs. Cosmas finalized by promising unchecked protection to whistle blower that their names and addresses will not be disclosed to anyone. She then called upon all stakeholders to join her Unit’s hand and ensure that the entire Authority upholds transparency and accountability.

The TRA has embarked on a nationwide sensitization campaign on the use of electronic cash machines. Effective 1st July 2010, businesses will be required to purchase and use TRA’s certified electronic cash registers to book their transactions. The machines that are sold at TRA certified dealers can help business to record and remit their VAT and tax returns directly to TRA.