Bonded warehouses crackdown: Government revenue down by almost 40bn/- in August -But deputy minister says it has nothing to do with customs law violations FINNIGAN WA SIMBEYE Dar es Salaam COLLECTION of government revenue fell by about 14 per cent last month amidst growing speculation of the existence of a local cartel bringing motor vehicles from Zanzibar to the Mainland by corrupt means, THISDAY has learnt. According to official statistics, revenue collection plummeted from 328bn/- to just 288.9bn/- between July and August, signalling the lowest collection figures of the year so far. But while acknowledging the drastic drop, the Deputy Minister for Finance, Jeremiah Sumari, said it had nothing to do with cars being brought over from Zanzibar on the back of forged documentation, as has been widely speculated. According to the deputy minister, the Tanzania Revenue Authority (TRA) has on the contrary been acting extra tough on the issue of car imports through the port of Zanzibar. You may recall that the strict system we on the Mainland apply in taxing car imports from Zanzibar has been pointed out by our Isles colleagues as one of the nuisances of the Union, Sumari told THISDAY in an interview. Last week, TRA announced the suspension of 22 customs bonded warehouses accused of seriously violating customs laws and procedures. This announcement was closely followed by the strong public speculations of a powerful cartel including several TRA officials being involved in the alleged car imports scam between Zanzibar and the Mainland. But Sumari instead attributed the decline in revenue collection figures to slowing import business by traders anxiously awaiting government policy covering the 2008/9 financial year. It is normal every year, around budget time, for importers to stop ordering new consignments and this affects the customs duty figures paid to the government, Sumari told THISDAY in an interview. This month (September), we hope to recover from last months slump and surpass the target because we expect more car imports as duty has been lowered, he added. According to TRA Commissioner-General Harry Kitilya, the suspended bonded warehouses are now the subject of a special audit aimed at establishing the level of customs law violations believed to have been committed. He said this includes ascertaining whether or not the warehouse owners were involved in outright tax evasion, and warned that legal action will be taken if such tax fraud is indeed proven. The audit is expected to be completed by mid-next month. The TRA conditions for licensing bonded warehouses, as per sections 62-69 of the East African Community Customs Management Act of 2004, include submitting an application with a plan of the premises and its situation in relation to other premises and thoroughfares. Warehouse operators are required to execute bond security, secured by a licensed guarantor, to the tune of at least 300m/- for private warehouses and 800m/- for general warehouses. The customs department has the right of access to any part of a licensed bonded warehouse to examine goods or documentary records. But according to former TRA board secretary Nyambele Mushengezi, it is not fair to suspend private owners of such facilities while TRA officials in-charge of the warehouses are left free. TRA should tell us specifically what measures have been taken against their own officers, stated Mushengezi in a recent interview with THISDAY. He pointed out that all goods destined for customs bonded warehouses are placed under the responsibility of at least one TRA officer.