Tuesday, February 16, 2016

Tanzania to curb illegal sale of petrol and tax evasion

The government has ordered owners of all petrol stations across Tanzania to install special devices connected directly to fuel pumps to monitor business transactions as part of a wider crackdown on tax evaders in the country’s $3 billion-a-year oil import industry. The state-run Tanzania Revenue Authority (TRA) said in a public notice yesterday that all petrol stations in Tanzania must have the special electronic fiscal devices (EFDs) installed by  March 1 this year. “These special EFDs will be directly connected to (the) fuel pumps,” TRA acting commissioner general Alphayo Kadata said in the statement. He warned that oil marketing companies that fail to heed the directive would face stern penalties, including the shutting down of their petrol stations. The TRA announcement came just days after the government, via Prime Minister Kassim Majaliwa, suspended two senior officials of the state-run Weight and Measures Agency (WMA) after it was revealed that oil flow metres at the Dar es Salaam port had remained unused for the past five years. The metres were supposed to monitor fuel imports into the country for purposes of ensuring proper government revenue collection. 

Tanzania's Prime Minister Kassim Majaliwa

An official investigation has been launched into allegations that some oil marketing companies might have colluded with unscrupulous public officials to sabotage the oil flow metres and deny the government its rightful revenue. The suspended officials are the WMA chief executive officer (CEO), Magdalena Chuwa, and the agency’s Dar es Salaam port manager, Bernadina Mwijarubi. Oil accounts for the single biggest import in Tanzania, and it has also been proven as a source of massive tax evasion. The Prevention and Combating of Corruption Bureau (PCCB) is investigating one local oil marketing company alleged to have evaded around 8.5 billion/- in taxes by diverting transit fuel into the domestic market. The government hopes that the setting up of fully-functioning oil flow metres at the Dar es Salaam port and EFDs at petrol stations to monitor oil imports and actual fuel sales at the pumps will help to control the sector better.  According to the latest Bank of Tanzania (BoT) monthly economic review, the cost of oil imports in the year ending November 2015 fell by 22 percent to $2.86 billion, largely as a result of plunging global crude oil prices. The ongoing crackdown on oil tax dodgers who were virtually untouchable during the eras of previous governments has been one of the cornerstones of current president John Magufuli’s crusade to boost government revenue collection all-round since he took office in early November last year.  Among tough measures he has already implemented towards this goal was to sack or suspend several senior public officials, including the bosses of both the TRA and the Tanzania Ports Authority, pending investigations into claims of corruption related to the collection of government tax.

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