REVENUES from custom duties could shoot up to 5trl/- per annum from the current 3.9trl/- had it not been for tax evasions by some unscrupulous importers as well as regional protocols that offer zero tariffs on some commodities, it has been observed.

The Tanzania Revenue Authority (TRA) collected 3.9trl/- from custom duties in 2013/2014 and it has set a target of 4.6trl/- for the current fiscal year.

The duties account for about 38 per cent of all revenues collected by the tax body. Appearing before the Parliamentary Public Accounts Committee (PAC) in Dar es Salaam on Tuesday, the TRA’s Commissioner General, Mr Rished Bade, was optimistic that the duties could hit the 5trl/- mark, save for tax evasions and the protocols.

The regional protocols in question are those signed among members of the East African Community (EAC) and the Southern African Development Community (SADC).

Through the agreements, some commodities pass through Tanzania untaxed to those countries. “By the half of this fiscal year (December 31, 2014) we managed to collect 2trl/- which is almost the amount we collected in 2011/2012.

We hope to collect the remaining amount of 2.6trl/- as per our target by the end of the financial year,” Mr Bade explained to members of the committee.

PAC member Esther Matiko (Special Seats- Chadema) noted with alarm that during the financial year 2011/2012, the TRA collected custom duties amounting to 2.97trl/- while at the same time there were exemptions to the tune of staggering 930bn/-.

“This means that in that year over 31.3 per cent of revenues in form of custom taxes were exempted by the government,” Ms Matiko complained.

The TRA Board of Directors Chairman, Mr Bernard Mchomvu, concurred with the MP, noting that if exemptions in customs were reduced by a half the government would be in a position to collect about 800bn/- each year.

Mr Mchomvu admitted on the other hand that there was some kind of ‘laxity’ at TRA in regard to collections of custom duties. Expounding further, the Commissioner of Customs at TRA, Mr Tiagi Kabisi, said the waiver on imported goods destined for other member states of either EAC or SADC are provided for under the Value Added Tax (VAT) on international trade.

Petroleum products, according to the commissioner, fetch about 40 per cent of all revenues from custom duties followed by spare parts for motor vehicles and machinery, construction materials (tiles), electronics and garments.

Custom duties are taxes levied on imports (and, sometimes, on exports) by the customs authorities of a country to raise revenues, and/or to protect domestic industries from more efficient or predatory competitors from abroad.

The duties are based generally on the value of goods or upon the weight, dimensions, or some other criteria of the item (such as the size of the engine, in case of automobiles).

Meanwhile, the PAC has directed the government to ensure the VAT Act of 2014 that was enacted by the National Assembly last year is immediately enforced towards reduction of tax exemptions.

The Chairman of PAC, Mr Zitto Kabwe Kigoma (North-Chadema), urged the TRA to come up with proposals on how the government can decrease the exemptions to just one per cent of the Gross Domestic Product (GDP).

Source: All Africa

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