Kariakoo traders made a strong stand against corruption within the Tanzania Revenue Authority (TRA) during their meeting with Prime Minister Kassim Majaliwa on Wednesday.
The government organized the meeting in response to a two-day strike by the traders in Kariakoo. Traders had called a strike on May 15,2023, in protest of three issues: bureaucracy at the port, confiscation of goods by the Tanzania Revenue Authority (TRA), and a new requirement that traders register monthly stock movements with TRA.
The meeting today started with a dramatic disagreement among the traders regarding the format of the meeting.
It appeared that the meeting was planned to be between the traders’ leadership and the Prime Minister. However, due to the traders’ objections, it was later decided to open the meeting to everyone.
Many traders expressed their grievances regarding the Tanzania Revenue Authority (TRA), stating that TRA corruption has reached an intolerable level. One trader, Sinyali Kimambo, shared, “TRA officers follow us to our homes and subject us to abuse. They constantly threaten to seize our goods. Do they expect us to sell our bodies?”, rhetorically asked Kimambo.
Traders emphasized that corruption by TRA occurs during the importation of goods or when their clients, especially those from other countries, move their cargo.
This issue has led many clients who used to come to Tanzania for goods to shift their business to neighboring countries like Uganda and Kenya. “TRA officers no longer prioritize the nation’s interests; it’s all about personal gain,” explained a cargo transporter from Kigoma Mr Balamu Nyenge. “TRA has become a toxic presence, causing most traders to flee Tanzania because Dar es Salaam has become unbearable.”
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Traders also pointed out how teams of TRA officers are strategically positioned throughout the Kariakoo market, eagerly waiting to harass individuals with consignments.
In response to the corruption issue, Prime Minister Kassim Majaliwa stressed that this battle must become a top priority for everyone, and people should be willing to expose those who engage in corrupt practices.
One of the main issues raised by traders is the existence of structural problems across multiple areas, including the customs, laws in question, and practices. Traders complained that although they are occasionally invited to provide input on new laws, especially those concerning taxation, their views are seldom taken into account.
Traders highlighted the lack of consistency in the fees charged for clearing goods at the port as a major challenge. This inconsistency leads to significant variations in costs, with some traders paying significantly less while others face much higher expenses for similar goods.
Abdallah Mwinyi, Secretary of the Tanzania Association of Traders, emphasized that the customs rates are impractical, which forces traders to pay bribes instead of risking the loss of their businesses.
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Furthermore, it was observed that while certain taxation laws are established at the parliamentary level, the Ministry possesses extensive authority to shape the direction of these laws through regulations. This practice often deviates from the intended purpose and tends to impose overly strict measures compared to the actual legislation.
Traders also voiced concerns about the existing value-added tax (VAT) requirement, which mandates that individuals with a turnover of 100 million submit VAT returns. Traders argue that this threshold is too low and does not align with the purpose of VAT.
Issa Masoud, a representative of Tanga’s business community, explained, “Traders are facing bankruptcy because someone with a turnover of 100 million is placed in the VAT category, even though such an amount can be earned by a small-scale trader. We need to raise the VAT threshold to at least Sh. 1 billion.”
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Another structural problem identified by traders is the lack of adequate taxpayer education provided by the authorities. Many Kariakoo traders and others have limited formal education and possess little knowledge about taxation. Instead of offering basic and customized taxpayer training, tax officials have exploited their lack of literacy, resulting in hefty fines and instances of corruption.
Freddy Vunjabei emphasized, “Most of these traders have not received formal education; they acquire business knowledge through experience. However, TRA has never made an effort to provide basic and tailored taxpayer training for them.”
Joint Committee formed
In response to the traders’ extensive submissions, Prime Minister Kassim Majaliwa established a joint committee consisting of 14 members, with seven representing the government and seven from the business community.
The government representatives on the committee will include the Deputy Permanent Secretary of the Ministry of Finance, the Permanent Secretary of the Ministry of Investment, Industry, and Trade, and the Permanent Secretary of the Ministry of Community Development, Gender, Women, and Special Groups. Additionally, the Permanent Secretary of the Prime Minister’s Office, the Dar es Salaam Regional Administrative Secretary, the Director of Policy and Research at TRA, and the Commissioner for Domestic Tax at TRA will be part of the committee.
From the business community, the committee will include the Chairperson of the Tanzania Business Community Association, the Chairperson of the Kariakoo traders, Martin Mbwana, Issa Masoud, Mpandila, Salome Mgaya (popularly known as Mama Bonge), and Fred Ngajiro (Vunja Bei).
Prime Minister Majaliwa also issued other directives, including the disbandment of tax task forces that were a source of complaint from the traders. He further instructed that the police should not be involved in tax verification as it falls under the responsibility of TRA, not individual police officers.
Regarding confiscated goods, the Premier directed individuals whose goods have been seized to report to the committee. He instructed the Commissioner to resolve disputes with clients by releasing the goods at a reasonable price or by providing a complete release without any cost.
To ensure the safety of traders and their businesses, the Chairperson of the Kariakoo traders requested the Prime Minister to specifically transfer, Police as well as all TRA officers who have been named by traders.