Tanzania has drafted a new Customs law that criminalises fraud, in a fresh bid to stop tax evasion.

The new drafted Customs law, which borrows heavily from Singapore where Customs fraud is a criminal offence, will provide for prosecution of suspects, impounding of goods and nullification of business licences.

“In the new law, under-declaration of the goods’ value and falsification of import products would be considered Customs fraud,” Tanzania Revenue Authority’s Commissioner of Customs and Excise, Tiagi Kabisi, said.

Currently, Customs cheating in Tanzania is treated lightly, although culprits are liable to a fine of $10,000 or licence-nullification.

A senior Custom’s officer at the Tanzania Revenue Authority, Bahati Allex, told The EastAfrican that unscrupulous traders were taking advantage of a pre-arrival declaration system, to declare false value of goods or misclassify items to evade payment of duty.

Finance Minister William Mgimwa banned direct cargo discharge, and ordered physical verification of all cargo after Customs officials unearthed a syndicate involving importers, clearing agents and foreign dealers.

And the revenue authority recently intercepted 200 containers loaded with products different from what was indicated on the pre-arrival declaration forms.

The importers had declared that the containers had computer central processing units (CPUs), mosquito nets, computers, solar panels, and aluminium products, which are tax-free. But on physical inspection, the containers were found to have taxable items like khanga and electronics.

Dr Mgimwa says the revenue authority can hit Tsh1 trillion ($625 million) a month in revenue collection, up from the current Tsh791.67 billion or $494.791 million, if Customs loopholes are sealed.

TRA hopes to increase collections to 19.9 per cent of GDP, thanks to the authority’s fourth corporate blueprint covering 2013/14-2017/2018.

In real terms, it would be able to collect nearly Tsh19 trillion ($11.875 billion) a year by 2017/18, up from Tsh8.03 trillion ($5.019 billion) in the just ended fiscal year.

The outline shows that the target will be realised by improving efficiency in tax administration, and broadening the tax net in order to collect more revenue particularly from lucrative sectors of mining, oil and gas, telecommunication, tourism, construction, real estate, financial industry, high net worth individuals and incomes from the informal sector.