The Tanzanian government has suspended operations of 22 bonded warehouse operators as investigations continue into a series of suspected cases of fraud within the Tanzania Revenue Authority (TRA).

Authorities in Dar es Salaam believe that most of the suspended operators have been violating customs laws and procedures governing storage of imports and exports, including the sale of used and brand new motor vehicles.

The EastAfrican has learnt that some of the largest automobile manufacturers in the world, which have operations in Tanzania, have also been suspended from operating the bonded warehouse pending investigations by the government.

Apparently, some of the bonded warehouses which have been suspended are owned by Tanzanian business tycoons with massive investments in Tanzania, Kenya, Uganda, United Kingdom, Dubai and Europe.

The suspended operators include Incar Tanzania Ltd, the authorised dealer for IVECO Trucks from Italy and Scania Tanzania Ltd, a subsidiary of Scania motor vehicle manufacturer.

IVECO, a well-known supplier of trucks, is known to have supplied the Tanzania People’s Defence Forces (TPDF) with an undisclosed number of trucks and buses last year.

In the late 1990s, the Tanzanian government and ScaniaCV AB of Sweden established a joint venture company, Tanzania Automobile Manufacturing Company (TAMCO) with 90 per cent and 10 per cent shareholding respectively.

The latest move by the TRA, which will most likely affect businessmen from landlocked countries who transport goods through the Dar es Salaam port, prices of used and brand new motors vehicles may also go up.

Walid Juma, acting Commissioner for Customs and Excise at TRA, said that stern measures would be taken against the suspended firms if they will not heed orders given under the notice provided to them.

“During the suspension, the respective firms are not allowed to undertake any customs transactions and all their employees are not allowed to enter any customs offices,” he said.

Kishan Enterprises Ltd of Tanzania, which is owned by Paresh Somaiya and Nilesh Somaiya has also been suspended. The owner of two sugarcane factories and the largest sugarcane plantations in Tanzania, Nassor Seif, has also been suspended.

Another firm, African General Enterprises Ltd, which is owned by Yusuf Manji, who has massive businesses in real estate, has also been suspended. Mr Manji owned bonded warehouse number 430 in Dar es Salaam.

Others that have been suspended include Aluminium Africa, the largest iron sheet-manufacturing firm, also for violations of the customs procedures.

In the strongly worded notice to the public, TRA published the names of the companies and their directors. It also published names of workers who would not be allowed by the Authority to undertake any clearing and forwarding business until the investigations are completed.

However, the suspension of some of the bonded warehouses will not have much effect since some companies own several warehouses and not all have been suspended.

“The problem is that the law on goods serviced by bonded warehouses is not very strict. That is why they are using these loopholes to sell goods that were originally meant for export, into the local market,” an official from one of the clearing and forwarding companies still in operation told The East African.

According to the official, many of these companies owe TRA millions of shillings for bonded goods, which didn’t cross the border. Some of the companies in question or their agents also failed to file returns to TRA to verify that goods had finally gone to their intended destination across the border.

Other sources told The East African that the malpractices had been going on for a long time. However, none of the officers at the TRA could establish exactly how much the state has lost in terms of revenue.

Surprisingly, by last Friday, some of those who were suspended were spotted at the TRA clearance houses and at the port doing business as usual.

Some of the big companies operating bonded warehouses that have escaped the suspension include Diamond Motors, Toyota Tanzania Ltd, CMC Motors, Tata Holdings, DT Dobie and Noble Azania.

Tanzania is the main entry point for goods destined for the Democratic Republic of Congo (DRC), Zambia, Burundi, Rwanda, Malawi and Uganda.

The acting Commissioner warned that buyers who transact with customs directly or indirectly should refrain from violating customs laws as the department moves to enforce maximum penalties for such violations.

“Offences of customs laws are punishable by way of penalties, forfeiture and jail sentences,” he added.

Reported by Mike Mande, Joseph Mwamunyange and Wilfred Edwin