Financial Crime World

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Parliament Sheds Light on Massive Tax Evasion Scandal Involving Senior Government Officials

A shocking revelation has rocked Tanzania’s parliament, revealing a major tax evasion syndicate involving senior government officials and personnel from the Tanzania Revenue Authority (TRA). The scandal is estimated to have cost the government a staggering Tsh128 billion (US$128 million) through dumping, exemptions, and tax evasion in the petroleum industry.

Irregular Tax Exemptions

According to reports, Tanzania lost approximately Tsh50 billion (US$50 million) in revenue due to irregular tax exemptions granted by the former Minister for Finance, Prof. Kighoma A. Malima.

Tax Evasion Scams

The government has also uncovered a tax evasion scam involving a gold mining firm and a petrol station in Dar es Salaam, resulting in losses of Tsh6 billion (US$6 million) per month prior to July 2003. Additionally, the TRA is currently investigating another suspected tax evasion scheme amounting to Tsh8 billion (US$8 million), which involves the importation of merchandise from the United Kingdom, Dubai, and the Far East.

Mineral Smuggling and Arms Trafficking

In addition to tax evasion, Tanzania has been plagued by smuggling of minerals such as gold, tanzanite, and diamonds, as well as arms and dangerous materials. The country lost an estimated Tsh300 billion (US$300 million) between 1995 and 2002 due to the smuggling of tanzanite alone.

  • Estimated annual loss of Tsh25 billion (US$25 million) worth of gold and gemstones
  • Tanzanian officials accused of involvement in smuggling diamonds and other precious minerals from the Democratic Republic of Congo

Illicit Trade in Arms

Both local and international criminals are generating huge sums from the illicit trade in arms and military logistics to warring factions in Burundi, the DRC, and Rwanda. Tanzania has become a major route for legal and illegal arms trafficking to these countries as conflicts continue in the Great Lakes region.

Stolen Motor Vehicles and Poaching

  • The country is dealing with a thriving market for stolen motor vehicles, particularly luxury cars such as Lexus, Toyota Landcruisers, and Mitsubishi Pajeros.
  • Criminal syndicates responsible for these crimes often involve murder and serious assaults.
  • Rampant hunting of elephants and rhinos in national parks and game reserves has resulted in the seizure of hundreds of kilograms of elephant tusks and other contraband.

Human Trafficking

Tanzania is also a source and destination for human trafficking, particularly women and children, who are subjected to prostitution, pornography, and forced labor. According to reports, thousands of Tanzanian children are trafficked internally or to neighboring countries each year.

Government Response

The government has promised to tackle these issues head-on, but critics argue that more needs to be done to combat corruption and ensure accountability among government officials involved in the scandals.