IMPORT duty paying entries into Zimbabwe have risen by 25 percent while transit cargo has plunged 62 percent since the introduction of the electronic cargo tracking system in May this year, the Zimbabwe Revenue Authority has said.
This signifies that there was massive existence of fake transit entries relating to goods destined for the local market, with potential revenue prejudice of several millions of dollars to the country.
Zimra, the country’s revenue collecting agency, said the electronic cargo tracking system had resulted in improved compliance in terms of transit cargo, as trucks are tracked in real time up to the point of exit.
The system has also resulted in a substantial number of cases being dealt with, which in turn has acted as deterrence to potential perpetrators of transit fraud.
“After the introduction of the system, there was a decrease in transit cargo by 62 percent and an increase in duty paying entries by 25 per cent,” said Zimra in e-mailed responses from Business Weekly.
Zimra commissioned the Electronic Cargo Tracking System on May 15 aimed at curbing smuggling and transit fraud.
Zimra said the average number of transit cargo per month before the introduction of the electronic cargo tracking system stood at 9 000 entries.
Misrepresentation is high for goods subject to import restrictions and higher rates of duty, such as fuel and goods covered by Statutory Instrument 64 of 2016 and indications are that importers would be trying to evade the import restrictions and paying duties and taxes.
Customs duty accounted for 8,39 percent of gross collections of $3,462 billion in 2016, about 96 percent of the targeted $3,607 billion. Estimates say Government collects 30 percent of its revenue from ports of entry.
The $1,2 million electronic cargo tracking system was purchased as part of a capacity building programme under a public and economic management project being financed by the African Development Bank.
Prior to the electronic tracking system cases of transit fraud were common amid reports that many trucks were eluding duties and taxes by falsely claiming to be on transit and off-loading imports in the country.
It is believed that hundreds of millions of dollars worth of products were finding their way onto the domestic market without paying taxes as importers were falsely claiming that goods are on transit.
Zimbabwe is a transit hub, catering for northbound and southbound transit traffic through its ports of entry and exit.
The country is a gateway to East and Southern African countries and it serves Zambia, Malawi and the Democratic Republic of Congo, among other countries. This creates huge risk for commission of transit cargo fraud.
The electronic cargo tracking system involves the use of electronic sealing devices, which are put on transit cargo at Zimbabwe’s ports of entry.
Further, the system uses geo-fencing technology and is supported by Google Maps to ensure the accuracy of location and movement of transit cargo, as the cargo is monitored in real time up to the point of exit.
As such, the electronic sealing devices send an alarm to the system’s control room at Zimra head offices in Harare on any violations, which include seal tampering, seal opening and incidents of geo-fence violations.
The system has also been integrated into Zimra’s existing Customs clearance system, the Automated System for Customs Data (ASYCUDA).