EU ponders for other ways to fight piracy in Indian Ocean

The European Union (EU) is planning for some other additional ways on how it could tighten security over the fight against piracy which poses a great threat to navigating ships off the coast of the Indian Ocean. The Head of EU delegation to Tanzania Ambassador Filberto Sebregondi made the remarks in Dar es Salaam on Monday last week during an event to inaugurate EU Week activities for the year 2014 which ends tomorrow on Saturday. The EU celebrates this occasion as ‘Europe Day’ around the globe on every year on 9^th May as it was on this day that 64 years ago the Shuman declaration was issued, when Robert Schuman put forward his idea on a united Europe to bring lasting peace and prosperity to the continent. In Tanzania the occasion was celebrated with a range of activities from 5^th to 11^th May under the theme “EU-Africa Partnership: People, Prosperity and Peace.” Ambassador Sebregondi said  in an exclusive interview moment after he had inaugurated the occasion when this reporter asked him a question with a view to know if there are any other ways the EU is currently undertaking in its endeavor towards its efforts to fight piracy in the region. Currently the EU provides training to army naval officers and police marine officers in countries bordering the Indian Ocean Tanzania included under the operation dubbed ‘Operation Atalanta’. The on-going training programme is the EU’s counter-piracy operation off the coast of Somalia especially along the Horn of Africa that aims to curb armed robbery of taking control of marine vessels transiting the high risk areas whereby pirates extort ransom money from the crew at sea.   

Head of EU delegation to Tanzania Ambassador Filberto Sebregondi

Under the new move, the EU naval force (EU NAVFOR) militants will be in a position to identify countries that offer financial military support to facilitate malpractices by pirates who are armed with sophisticated war weapons when carrying out their mischief. The EU’s move has come amid reports which have drawn suspicion from the international community that, the pirates along the Indian Ocean might have been receiving financial support from certain powerful nations, a factor that makes them become so obstinate. The envoy made the call that aimed to highlight efforts on fighting piracy along the East African coast and humanitarian operations support by the European Union Naval Force (EU NAVFOR) in the region since it was mandated to work in August 2013. In another development, on Thursday this week Ambassador Sebregondi and East African Community (EAC) deputy secretary general on finance and administration Jean Cloude signed an agreement worth Euro 2.3 million grants in Arusha. The signing agreement is aimed at supporting the fight against piracy and other maritime crimes rocking the shores of the Indian Ocean. The money will see the Maritime security programme (MASE) jointly manned by the EAC  and the European Union secure trade routes in East Africa  and the entire Indian Ocean region. When a asked to comment on the constitution review process currently going on in the country, the envoy noted that, his delegation are just observers of the whole process in the Constituent Assembly (CA).

However, he noted that, the EU countries have no any reason to support one idea or another but is in support of the existing union between Tanganyika and Zanzibar. Meanwhile, the nine EU countries which include United Kingdom, German, France, Italy, Sweden, Finland, Norway, Denmark and Belgium led by Ambassador Filiberto Sebregond have jointly signed contracts worth €626 million (about Sh1.39 trillion) as grants to Tanzania. The money would be used to facilitate projects for renewable energy, infrastructure and agriculture in Dar es Salaam and Zanzibar, the signing was part to celebrate the Europe Day occasion.

TRA issues directives over the use of EFDs in the country

Tanzania Revenue Authority (TRA) has introduced directives to businesspeople and trading enterprises in the country on the implementation and supervision of laws governing the basic use of the Electronic Fiscal Devices (EFDs) The directives are to be strictly observed as in accordance to the laws in order to ensure work efficiency and reinforcements as per the Cap 104 of the subsection 2 of the TRA Act of revenue collection. TRA’S Director for Taxpayer Services and Education Richard Kayombo said yesterday in Dar es Salaam that, punitive measures are to be introduced to stubborn traders who tend to misuse the devices for the purposes for which they have been designed. He told the Guardian on Sunday in a telephone interview and later issued a statement which stated that, there will be a series of warning to be issued in three times to alert the would be defaulters.  After that, he continued and noted that stern measures would be taken according to the law whereby the culprits would be charged 5 percent of the total amount of their collections for the first time.  On the second warning of defiance, a penalty of 10 percent would be imposed to defaulters. He further noted that on the third time, serious penalties would be imposed including a fine of between Sh. 1 million and 3 million or faces a jail term of not more than three years imprisonment. He also reiterated TRA’s commitments in moving ahead with the enforcement of EFDs with even much more vigour after the president of The United republic of Tanzania cleared the air on the position of the government that there is no turning back on EFDs.  “This is because we want to do away with unrealistic tax assessments that are based on guess work due to lack of reliable sales records on the side of the business community either due to poor record keeping and sometimes intentionally with the aim of evading taxes”, he said. However, he reiterated his plea to the business community in the country to be cooperative and simply comply, while pledging to treat them with dignity and respect and do everything possible to ensure that there are no skirmishes along the way. In recent years, the government introduced electronic use of EFDs which involves Electronic Tax Register (ETR) Electronic Signature Device (ESD) and Electronic Fiscal Printer (EFP). 

Deputy Finance Minister Adam Malima

The three EFD machines have been designed for use in business for efficient management controls in areas of sales analysis. They started effectively in 2010 to business people in the country with the first phase introduced to those business people registered with Value Added Tax (VAT). The second phase currently in move has targeted business people who are not registered with VAT.  According to TRA, the Machingas are exempted as they do not have permanent places to conduct their businesses. However, the targeted groups are those with whole sale shops, supermarkets, shops selling motor spare parts and mobile phone shops. Others are bigger business entities such as Textile shops, Hotels, bars, photo studios, take away food stores, motorcycle sellers, and motor vehicles sellers and many others of such types.  Statistics made available by TRA indicates that, only 200,000 business people and their entities out of estimated 1.5 million entities have been registered for VAT. Further more it should be noted that the prices of the EFDs were reduced from 800,000 to a range of 600,000 to 690,000 since 2013 for ETR machines depending on the make after successful discussions between the distributors and TRA.  Others such as Electronic Fiscal Printer and Electronic Signature Device are sold between Sh. 1 million and Sh. 1.2 million The distributors however have the freedom to negotiate with the traders for even better deals, installments or any other arrangements that suits them. Meanwhile, the Deputy Finance Minister Adam Malima has faulted some politicians who are inciting few traders to boycott the use of EFDs following the recent move by some traders who became resentful when the government introduced to them the use of EFDs. He made the call on Friday when he opened a two day training seminar for journalists reporting tax news which was organized by their network known as ‘Tawnet’ in Dar es Salaam. He said during the time when traders went on strike to boycott the EFD machines, there were scores of politicians who were behind them while they know there is no country which can conduct its own development without collecting taxes to run various development projects.

Too much expenditures haunts set budget

A renowned economist has warned that, over expenditure on government’s revenues will continue haunting the annual set budget allocations in the country. Professor Ibrahim Lipumba made a concern on Monday this week in Dar es Salaam when contributing a point during the inauguration of a report on Economic growth for Sub-Saharan countries in Africa for the month of April 2014. The report which was presented by International Monetary Fund (IFM) in collaboration with Report on Poverty Alleviation (REPOA) highlighted the situation of economic and financial growth for African countries within south of Sahara Tanzania included. According to the report, the economic growth of Sub-Saharan counties has increased from 4.9 percent in 2013 to 5.5 percent in April 2014. The report also indicates that Tanzania’s economy has grown up to 7 percent and despite of this its people continue to be poor. Professor Lipumba issued a concern a day before the Minister for Finance Saada Mkuya unveiled a 19.6 tr/- draft national budget for the 2014/15 fiscal year which shows that, about 70 percent of it is expected to go to recurrent expenditure. In the draft, Saada noted that, in the 2014/2015 financial year, the government plans to borrow 4.275trn/- to fill the revenue gap. Recurrent expenditure has increased to 14.2trn/- compared to 12.6trn/- in the 2013/2014 financial year. Basing on the experiences of the budget in the country, Prof. Lipumba noted that, the problem currently affecting the set government budget is too much expenditure for unnecessary things and yet the country has fewer sources of income. He said, the yearly increase of national budget is not useful to Tanzanians if the government is not ready to reduce unnecessary expenditures. According to him, government’s plans on its budget is mostly focusing on too many expenses which are unnecessary rather than looking at the investments potentials, a channel through which it could accumulate more revenues.  

Professor Ibrahim Lipumba

In his presentation, Prof. Lipumba made a reference of such extravagant use of tax payers’ money is together with the Sh. 60 billion used to establish Constitutional Review Commission (CRC), and yet the government has failed to honour the recommendations issued by the CRC team. However, Prof. Lipumba suggested that, in order to get away from the deficit, the government has a reason to waive  all tax exemption imposed amounting to Sh. 1.8 trillion which is equivalent to 5 percent of the National Gross Domestic Product (GDP). Another contributing factors of the over expenditure is due to many projects which are supervised by the government which he noted that many of them are too expensive beyond estimation  which are increased at between 30 and 50 percent rates more than their actual costs. Commenting on the Tanzania’s economic and financial growth, a representative of the IMF in the country Thomas Baunsgaad said, despite increase on economic growth, the country has not yet successfully reduce poverty. He said the external aid has been increasing now and then an aspect that causes the increased poverty situation in the country. He said Tanzania has a high rate of increased loan from 28 percent to 42 percent of the DGP.  According to him, if African countries want to get away with poverty stricken situation there should be formed strategic policies which could help alleviate the situation. He insisted that, some of these policies must ensure the growth of the agricultural sector to utmost level as well as policies which could enable increase employment in industrial sector, and that which could enable the availability of electricity supply to the people and also to create a conducive environment for trading.

New software designed to help curb theft on ATM machines.

The rate at which theft of bank customers’ money through Automated Teller Machines (ATM) is increasing with the perpetrators skipping without being apprehended in various banks in the country may become a dream of the past, the Guardian can report. This is after the discovery of a new software program known as ‘Inta Fedha’ which has been designed by a Tanzanian ICT expert and professional programmer, Arthur Assenga in October 2013. The software which has been given permanent registration by the Ministry of Trade and Industry though Copyright Society of Tanzania (COSOTA) in late February this year, has designed for cyber crime with a registration number CST/APP/REG/WORKS/VOL XX. 744 Cosota. Speaking in an exclusive interview on Wednesday this week, Assenga who is also the Director of a Dar es Salaam based Tullo ICT Computer Engineering Ltd, said that his software is currently undergoing technological test.  According to him, once proved to be workable, would be sold to banks in the country to curb cyber crime which has become unavoidable phenomenon for lack of modern technology  The software to be made workable soon in various banks’ teller machines once approved has been designed to operate in computer systems in three different options with as view to net culprits who tampers with the bank customers’ account. He noted that, among the most developing concept features about his software is that, it has been designed to reveal the presence of people by taking their images in form of pictures once they approach ATM machines with intent to withdraw money. The software is also designed in various ways to prevent people from accessing customers’ bank accounts to which are not specifically registered or recognized by the bank. He noted also that, the software has been designed to facilitate the work of withdrawals and sending of money with ease through internet to far a distant area more safely. Elaborating more about the software, Assenga noted that, he saw the need to work on the programme after having realized most banks are not trustworthy in their operations following many claims by their customers whose money gets lost through their accounts without clarification when they need. Elaborating more about the software and how it is made to work, Assenga noted that, this is designed to detect finger prints and that all customers of the bank would have to register afresh with their bank accounts. He said the registered customers will not be able to give their relatives their smart cards and pin numbers the way they have used now, as this would detect the second party as the system in the banks would not recognize him/her. He said, there will be three signals alarm raised at the ATM machine to inform a customer attending the ATM service, and who shall not have been registered by the system to vacate the area otherwise the machine would detect the presence of a thief around. He added that, not only that, it would also take some photos of the image of a person around and restore for proof incase anything happens while someone is still at the ATM machines. For the last four years, there has been a series of theft which has been taking place in various banks through ATM machines and the culprits have been walking freely out without being detected or nabbed by the banks’ security people. Cyber crime started in March 2010 when Sh. 300 billion was reported reported to have disappeared in a mysterious condition in ATM machines associated with the National Bank of Commerce (NBC). After reporting of such theft the biggest ever in the country through ATM machines for people were arrested in connection with the theft, two years later, it’s estimated that Sh. 700 million were stolen from the National Micro-Finance Bank (NMB) at different times in the country. Police in Mwanza region managed to apprehend four people in connection with such loss of money from the bank who were caught preparing to steal money from the ATM machines at the NMB bank branch located at PPF Plaza building at 12:00 midnight. The arrest followed a trap set to get hold of them following a tip from a good Samaritan who informed the police of such theft, and police laid a trap acted swiftly and managed to net them on the spot together with some tools used to do their mischief. Meanwhile, the Bank of Tanzania (BoT) has teamed up with four other specialised agencies to get at the source of cyber crimes which have so far eluded police and financial intelligence. In September 2013, BoT Director for National Payment Systems Lucy Kinunda was quoted by this paper as saying that, the joint high level task force has drawn expertise from the Central Bank itself, Tanzania Bankers Association (TBA), Tanzania Communication Regulatory Authority (TCRA), Financial Intelligence Unit and Cyber Crime Unit in the office of the Director of Criminal Investigation. In the meantime, she said, BoT had since directed all commercial banks to enhance their risk management processes and ensure that dishonest staff are prosecuted as well as ensure strict vetting of staff done frequently, among other things. The Central Bank has also directed the commercial banks to carry out awareness programmes on the safe use of ATMs, including careful and handling of sensitive details such as Personal Identification Number (PIN) to protect their accounts against unauthorized access. Police reports state that in the past few years a total of Sh1.3 billion; $551,777 and Euro 8,897 had been stolen across the country through different forms of cyber trickery. ATM theft commonly known as “card skimming” has now become a critical problem across the country, notably the city of Dar es Salaam – where the burden of refunds is weighing down man banks. Meanwhile absence of legislation to address cyber crime in Tanzania is a factor causing difficulties to prosecute criminal cases of recent thefts in some ATMs. Adam Mambi, an ICT specialist, told this paper in Dar es Salaam in November last year that, the country needs policy and legislation to define and provide a framework for operation and enforcement of legally accepted cyber activities.

How high costs of fuel importation discourages local oil companies

High cost of fuel importation charges has been cited to be an exacerbating factor which has been discouraging most local oil marketing companies from participating in tender competition process through Bulk Procurement Systems (BPS) in the country, an expert has observed. The General Manager of the Petroleum Importation Coordinator (PIC) which coordinates bulk procurement for the petroleum products on behalf of oil marketing companies in the country since its inception in mid 2012, Michael Mjinja said in Dar es Salaam early this week. Mjinja has observed that, high importation costs amounting to millions of US dollars is a prime factor that impedes most Tanzanian oil marketing companies to meet conditions imposed under BPS. He said due to financial squeeze coupled by less capital for investments has made most local oil marketing companies not to participate in the monthly tender bid competition which his firm offers for BPS in the country. He said since BPS started, out of 31 local registered oil marketing companies operating in the country, only two which have participated for tender procurement. He mentioned the companies as Gapco Tanzania Ltd and Enoc Africa Ltd both of which have ever won the tenders two times. The call by Mjinja echoed on Tuesday this week a day when the Energy and Water Utilities Regulatory Authority (EWURA) revoked licences of nine local oil marketing companies dealing with wholesale petroleum business in the country. Earlier information released by EWURA was quoted by the media as saying that, the companies violated business principles in the petroleum sub-sector resulting into their failure to conduct petroleum wholesale business for more than six months consecutively as stipulated in their contract that is contrary to provisions of Petroleum (Wholesale) Operations Rules, Government Notice No 419 of 2012. Mjinja said  moment after he had just addressed a press conference the winner of 22^nd tender bid for supply of bulk oil in the country for the month of June this year which his firm conducted, for which a Kenyan oil marketing company known by its name Gapco Kenya Ltd emerged the winner. Elaborating more on the company’s inability to participate he mentioned another factor is driven on contract made between ship owners and other logistics whose process is long and rather tiresome that requires professional ability and experiences on how to handle them. “With all these hardships which are compounded by less capital for investments, is an aspect that draws back the desire of local companies to participate”, he said adding that, there is a need for the government to empower them in terms of issuing soft loans. He further noted that, because of this trend, his firm had decided to reduce the bulk volume and timeframe from two months to currently one under which the importer was subjected to accomplish the necessary laid down logistics for importation process with a view to save local companies. However, he said that, since the system was adopted six months ago, there have been a number of ships flocking at the dock of the port waiting to empty their consignments and charging between one and two USD as this is calculated per metric ton per hour. The on-going trend has assured the nation of the constant supply of fuel in the country bearing the fact that, an importer also guarantees the performance bond of $ 10 million (Sh. 16 billion). He said, the bond is to commit itself that incase it fails to meet the laid down conditions as stipulated in the laws of importation, then it has their money confiscated and never refunded. He added that, under these restricted conditions most oil companies have been obeying the order and have never strayed. The revelations prove how some oil dealers have been cheating the government and the general public by under-declaring what they import to the country, starting with where the oil was purchased, and a move that finally enabled dishonest dealers to evade paying taxes. Meanwhile, statistics made available by EWURA indicates that, bulk oil procurement has brought about an increase in tax revenue an aspect that the firm has been indicating price quotations according to the rate of supply. Statistics shows that, since bulk oil importation was first introduced, there has been a tremendous increase of supply that range between 3 and 4 percent rate according to premium offered by importing oil marketing companies in tendering processes. The system has also helped combat what is technically known as ocean fuel loss which occurs when ferrying oil from the point of origin to its destination. Controlling ocean fuel loss now enables the government to have precise statistics on fuel imports. Statistics made available shows that, it’s estimated that Tanzania uses a total of 2 million litres of petrol, 3.9 million litres of diesel, 550,000 litres of oil jet and 190,000 litres of kerosene per day. According to EWURA, the country is also a transit hub for oil products that are shipped to nations in the region including the Democratic Republic of Congo, Rwanda, Burundi and Zambia.