Two Cabinet ministers have been fingered in a suspected racket involved in the smuggling of fuel through the use of false declarations, facilitated by a clique of Zimbabwe Revenue Authority (Zimra) officials and the matter has since been referred to the State’s economic crimes agency for further investigation.
The names of the ministers involved and their accomplices in the scan have, however, been kept under wraps as fears abound that revealing their identities would jeopardise the ongoing probe by National Economic Conduct Inspectorate (NECI.)
It has emerged that Zimra has scaled up efforts to plug the leakages through electronic sealing of fuel tankers at Beitbridge Border Post, Forbes Border Post, National Railways of Zimbabwe wagons and more recently, trucks carrying fuel imported through Feruka Pipeline.
Zimra this year instituted investigations into suspected widespread smuggling of fuel following anonymous tip-offs on false declaration of petrol and diesel that was being cleared as non-dutiable Jet A1.
The internal investigation by Zimra’s terms of reference included identifying the modus operandi used in fraudulent clearing of petroleum products, identifying agents who worked with importers, assessing the magnitude of loss from false declarations and identifying corrupt Zimra officials involved in facilitating tax evasion.
Zimra chairperson Willia Bonyongwe, confirmed that the internal investigation had been completed, but was reluctant to discuss its findings since the matter was now under further investigation by the NECI.
“We did our internal investigation, but I cannot discuss the people and companies implicated since the matter is under further investigation. The challenge is also that some individuals may have been implicated through name dropping and this needs to be authenticated,” she said.
However, Business Weekly is reliably informed that the majority of the more than 100 cases that were investigated were successful, with assessments for unpaid import duty having been undertaken while in some cases the culprits had agreed to settle the unpaid tax obligations.
In instances, some of the contraband was seized by the revenue authority. The fuel scam, which is now under investigation by NECI, a State agency responsible for investigating serious economic crimes, is feared to have prejudiced the country of millions of dollars in potential tax revenue. The investigation covered the period 2016 to 2017.
Sources familiar with the recently completed investigation, told Business Weekly that the matter had been referred to NECI after the internal probe by Zimra, unearthed extensive smuggling of fuels, which was falsely declared as jet A1, a product exempt from import duty.
“Since it is now suspected that two Cabinet ministers are involved in the fuel scam, the matter has been referred to NECI for investigation, which is already underway and nearing completion. Action will be taken based on recommendations by NECI,” said one source. It also emerged that a number of reputable transporters among them South African registered Wardens and clearing agents such as by Real Sky Freight Logistics and Fortune Freight were involved in the scam.
In one of the cases, Wardens trucks were allegedly intercepted carrying petrol, declared as aviation fuel, belonging to Harare based company African Preserve and Kaladan Investments of Bulawayo. “The matter has been escalated to NECI because Zimra feels that this is a big issue and a national one. Zimra feels that since these findings were from its own internal investigation, if someone external carries another one, people would be willing to talk,” the source said.
“Investigations unearthed massive smuggling of fuel, disguised as Jet A1. This is why Zimra has also started electronic sealing of Trucks at Msasa, because initially, none thought about Feruka fuel imports.
“When we started electronic sealing at of trucks at Beitbridge, some started bringing their fuel through rail. Zimra is moving to also seal fuel that comes on NRZ, which is sort of geo-fencing,” the source added.
“Initial investigations conducted at Beitbridge border post in July 2017 confirmed that Wardens transport was indeed making false declarations of petroleum products, as alleged in the hotline reports, as two tankers loaded with petrol declared as Jet A1, were seized on July 7.”
The same transporter was also implicated in fuel smuggling on several occasions and some of the tankers intercepted included WAR 804 GP (Horse) and FH 83BBG (trailer), which was intercepted on March 3, carrying 40 009 litres of petrol declared as aviation fuel.
Investigations by Zimra established that upon discovering that they were being investigated, the suspects changed their business premises, which were indicated on the tax clearance documents. Most of the companies implicated in the scam were in Harare and Bulawayo.