Parliament Debates Major Tax Evasion Scandal Involving Senior Officials

The Tanzanian parliament was rocked by allegations of a massive tax evasion scheme involving senior government officials and personnel from the Tanzania Revenue Authority (TRA). According to reports, the government has lost approximately Tsh128 billion (US$128 million) through dumping, exemptions, and tax evasion in the petroleum industry.

Tax Evasion Scheme

During the parliamentary debate, Deputy Minister for Finance Dr. Festus Limbu revealed that a gold mining firm and a petrol station in Dar es Salaam were at the center of the scam, which had been ongoing since July 2003. Prior to its discovery, the government was losing Tsh6 billion (US$6 million) monthly through this scheme.

The TRA is also investigating another suspected tax evasion scam worth Tsh8 billion (US$8 million), involving the importation of merchandise from the United Kingdom, Dubai, and the Far East.

Other Criminal Activities

Mineral Smuggling and Arms Trafficking

The smuggling of minerals, arms, and dangerous materials has emerged as another major source of illicit money laundering in Tanzania. Between 1995 and 2002, the country lost more than Tsh300 billion (US$300 million) through the smuggling of tanzanite alone.

The Democratic Republic of Congo is also a significant contributor to this illegal trade, with Tanzanian officials reportedly involved in smuggling diamonds and other precious minerals from the region.

Human Trafficking, Poaching, and Motor Vehicle Theft

• The trafficking of stolen motor vehicles is another major criminal activity generating substantial illicit proceeds in Tanzania.
• Gangs of motor vehicle thieves operate in cities and towns across the country, stealing high-end vehicles such as Lexus, Toyota Landcruisers, and Mitsubishi Pajeros. These vehicles are then sold to buyers in different parts of the country or exported to neighboring countries such as Kenya, Malawi, Zambia, Uganda, and the Democratic Republic of Congo.
• Poaching is also rampant in Tanzania’s national parks and game reserves, with wildlife authorities impounding large consignments of elephant tusks and rhino horns.
• Human trafficking is another major concern, with women and children being trafficked internally for purposes of adult and child prostitution and pornography. The US State Department has identified Tanzania as a source and destination country for trafficked persons.

Government Response

The government has vowed to tackle these criminal activities head-on, with the Ministry of Finance announcing plans to revamp the TRA’s tax collection system to prevent future losses.

• The police have also launched a crackdown on motor vehicle theft, poaching, and human trafficking, with several high-profile arrests made in recent months.
• As the country grapples with these complex criminal activities, it remains to be seen whether the government’s efforts will be sufficient to curb the tide of corruption and illicit money laundering in Tanzania.