TANZANIA-ECONOMY: PRESIDENT ORDERS TAX-EVASION PROBE

By IPS Correspondents Reprint | | Print |

PAUL CHINTOWA

DAR ES SALAAM, Nov 9 1994 (IPS) - TANZANIAN PRESIDENT ALI HASSAN MWINYI WEDNESDAY ORDERED INVESTIGATORS TO TRACE AN ESTIMATED 70 PERCENT OF IMPORT TAX REVENUE THAT GOES UNCOLLECTED.

“I AM ORDERING A FULL INVESTIGATION INTO TAX EVASION AND ILLEGAL EXEMPTIONS” WHICH COST TANZANIA 132 MILLION DOLLARS IN LOST REVENUE IN 1993, MWINYI SAID IN A STATEMENT ISSUED BY HIS OFFICE.

HE SAID THAT, ACCORDING TO REPORTS HE HAD RECEIVED, THE LOSSES WERE DUE TO “FRAUDULENT, ILLEGAL PRACTICES AND ADMINISTRATIVE LEAKAGES,” AND ADDED THAT THE NAMES OF IMPORTERS WHO HAVE EVADED THE FISC HAVE BEEN SUBMITTED TO HIS OFFICE.

THE CULPRITS DIVERTED TRANSIT GOODS AND SMUGGLED GOODS, LIKE BEER, TO THE LOCAL MARKET WITHOUT PAYING TAXES, ACCORDING TO THE STATEMENT.

MWINYI SAID THERE WAS EVIDENCE THAT BONDED WAREHOUSES WERE BEING USED TO SMUGGLE UNTAXED GOODS INTO THE COUNTRY.

“THE IMPORTERS WHO USE THESE CHANNELS ARE COMMITTING A CRIMINAL ACT AND WILL NOT BE TOLERATED. THE GOVERNMENT HAS INSTRUCTED THE PRE-SHIPMENT INSPECTION COMPANIES TO IMMEDIATELY INSTITUTE A SURVEILLANCE SYSTEM TO CRACKDOWN ON THESE TAX EVADERS.

“WE ARE ALSO STRENGTHENING MONITORING OF THE BONDED WAREHOUSES,” THE STATEMENT SAID.

DESPITE THE COMMISSIONING OF TWO FOREIGN COMPANIES FOR PRE- SHIPMENT INSPECTION, CORRUPTION HAS BEEN IDENTIFIED AS A MAJOR SOURCE OF POOR TAX COLLECTION IN THE COUNTRY, WHICH DEPENDS HEAVILY ON FOREIGN AID TO FINANCE ITS SPENDING.

THE STATEMENT WARNED THAT PUBLIC OFFICIALS FOUND GUILTY OF AIDING TAX EVADERS WOULD BE PUNISHED WHILE DEFAULTING IMPORTERS RISKED SEVERE PENALTIES, INCLUDING HAVING THEIR IMPORT LICENCES REVOKED.

“I WILL NOT ALLOW THE GOVERNMENT TO GO TO THE DONOR COMMUNITY WITH A HAT IN HAND WHEN WE, THE TANZANIANS, HAVE NOT PLAYED OUR OWN PART TO EDUCATE OUR CHILDREN, TO PROVIDE HEALTH SERVICES AND TO MAINTAIN OUR ECONOMIC INFRASTRUCTURE,” MWINYI SAID.