Tanzania Revenue Authority has issued a letter claiming that a tug-of-war with freighters has ended, but the lack of details of how the matter was resolved left me concerned that all is not well. Transporters have been lamenting how TRA officials at Namanga have been hiking taxes, eroding their profitability, and snowballing the clearance process, leaving the grocery cargo to rot. This article reviews the Namanga saga between the transporters and the TRA officials and draws some recommendations of my own.
Perhaps the most potent criticism against the TRA officials at the Namanga border is caused by the way freighters have been able to distinguish TRA services at Namanga compared to other borders, such as Horiri, Horo Horo, and others, claiming to have not faced complaints that Namanga TRA officials have been accused of.
From the onset, I read that TRA personalities at Namanga behave in a manner contrary to national values and expectations.
The transporters aver that TRA officials at Namanga have been imposing artificial estimates on their cargo well above the receipts they showed them. The officials claimed those receipts were forged to undervalue the goods in their lorries heading to Kenya. One lorry driver lambasted TRA officials at Namanga for estimating the tomatoes in his lorry worth Tshs 10 million while the actual purchase value was Tshs 4 million.
Read Related: Unfair Taxation or Necessary Evil? The Kariakoo-TRA Conflict: Where Are We Messing Up?
He said TRA officials were gazumping his cargo to demand bribes. He said he had been detained for three days, and his fresh groceries were beginning to stale, causing him untold miseries.
He said he would never be able to recover from the colossal loss TRA officials at Namanga had caused him. He wished there were mechanisms available to seek financial compensation from TRA.
Another driver said his employer had been calling him, thinking he was causing the delays, and his explanations were not accepted. He told TRA it was conducting itself as if it were on a “go slow strike.”
A tax assessment and payment process that would typically take 15 minutes was taking three hours per lorry, leading to unnecessary queues. He said that if the math had been taken to assess the loss of delays, lots of money would have been wasted.
Most of the lorry drivers felt that the problem was not TRA per se, but whoever allocated those officers there did not do his homework correctly. The attitude of the TRA officials at Namanga was anti-business, as if they perceived their jobs must serve them, not the other way around.
The drivers’ top wishlist was that those officials must not interact with the TRA clients; they could be assigned other responsibilities away from customers. It was getting personal and nasty, too! The relationship was so bad, and the two sides were unlikely to resolve their differences without external intervention.
TRA issued a letter assuring the matter was amicably resolved. Still, it remains unclear how they sorted it out, whether the complained officials were reassigned to other duties or were issued new instructions on dealing with the problems affronting them.
At the heart of the furore at the Namanga border lies a shambolic assessment and payment process that could have been acted upon from the point of departure. If every exporter had been allowed to have his cargo checked by a nearby TRA office at a point of departure and the lorry sealed, all this mayhem would have been avoided.
Centralization of tax assessment and payment at borders is part of the problem. TRA will never have enough number of staff to expedite the process. As a result, frequent bust-ups will occur at the borders, notwithstanding the lorry drivers’ remarks about the excellent services at other borders.
Also, read Did You Know Withholding Tax Isn’t a Cost but a Benefit?
For some geographical reasons, the Namanga border appears busiest, and her challenges cannot be considered comparable to those of other border services. The traffic there is intense.
The unavailability of cargo scanners is another threat to fast tax assessment and payment services. All these should be done at a point of departure to reduce unnecessary congestion, delays and fomenting bad blood. If you peer at TRA regional offices, you can see a lot of staff lazing around who could be assigned cargo tax assessment and payments.
At borders, the responsibilities will shift to verifying that TRA seals have not been tampered with and perusing official documents prepared by district and regional offices. That should take hardly 5 minutes per lorry, and everybody should be happy.
There has been a well-established habit of not finding permanent solutions to problems but deferring them to an unknown future date. During President Jakaya Mrisho Kikwete’s reign, medical doctors’ strikes led to promises of salary increases.
Still, nothing tangible has been done to address this demand in a way acceptable to doctors. Doctors and patients are left exchanging services for bribes to make ends meet, and the government is a mere spectator in this circumstance.
Retailers have been complaining about over-taxation, but their concerns have, at best, been swept under the carpet while temporary solutions have been adopted. Over time, we repeatedly deal with the same issues without finding permanent solutions.
Part of the solution for retailers is to acknowledge that they are hands-to-mouth, and tax assessment ought to end in favour of annual flat rates. The application of VAT ought to be abandoned because retailing faces too many costs, including rent, labour, and hefty losses. Those angling Kariakoo retailers to fund three ministries a year hardly know what they are talking about.
Retailers across the board are losing money, and the best the government can do is eliminate most taxes. Big miners should fund all government bills, not local retailers sweating to put food on the table.
The scripture is very instructive here: “…it is an alien who has to pay taxes, and the son is free…” Less taxes on our people will generate plenty of jobs. It is imperative to remember that the informal sector is the major employer, and imposing taxes on it will kill it, adding crimes such as home invasions and burglaries, with street muggers very much encouraged to our collective chagrin.
Retailing should be added to the informal sector because it is too small. Retailers with an annual income of over Tshs 200 million should be treated as a formal sector. However, the figure below should be part of the informal sector, not deserving of shouldering a tax burden.
