Tanzania Revenue Authority (TRA) has said that the effective implementation of the Single Customs Territory (SCT) would help to curb cheating in the cargo declarations.

As a result, the TRA Chief told East African Business Week during the awareness workshop to stakeholders on the implementation of the SCT in Dar es Salaam last week that would increase government revenues.

The TRA’s Commissioner General, Mr Rished Bade said the system will have special mechanism of monitoring the whole process from declaration of the cargo to its destination.

“Once the implementation started would help to control some dishonest traders, who have been evading paying proper tax by providing incorrect declarations of their cargos,” Mr. Bade said.

He said experience from the northern corridor constituting the countries of Kenya, Uganda and Rwanda which piloted the SCT since February this year, shows that the execution of the new system has controlled false declarations and increased revenues in the respective governments.

With the SCT the malpractice by which some traders used to make false declarations that the cargo is transit destined while it is meant for the local market, thus denying the government the much needed revenues.

The workshop according to Bade is meant to impart knowledge to clearing agents, importers and exporters on the new system to be applied in the SCT to ensure it delivers the maximum expected results.

“It is the obligations of the clearing agents to inform importers and exporters on how the system works,” he told East African Business Week.

He allayed fears to clearing agents that the implementation of the SCT will rob their clearing and forwarding functions.

Instead, he noted all the clearing and forwarding functions will be conducted by the agents but in a new system.

He said the pilot project on SCT that started early May this year and takes on board few goods has proved to be efficient with cost of doing business easing down.

Speaking on behalf of the East African Community (EAC) Secretary General, the Director General, Customs and Trade in the EAC, Mr Peter Kiguta said both northern and central corridors will official start implementing the SCT next month.

“By July 1st, all goods across the EAC region will be cleared using the SCT,” he emphasized.

Experience from the northern corridor shows that the cost of doing business has tremendously gone down, that will impact on consumer prices as well as increased government revenues, he said.

Kiguta added that this is a result of removing trade barriers that have been causing unnecessary delays.

For example, he said it takes only seven days to cross from Mombasa port to Kigali in Rwanda while a truck spends only four days from the same port to Kampala, Uganda.

According to him, transformation of the EAC into a SCT is what is required to spur liberalized trade as goods would circulate freely through the territory.

“We still have internal controls… Goods are not circulating freely,” Kiguta remarked, adding, “As a Customs Union we are supposed to be one Customs territory.”

To work effectively, a SCT requires, among others, a common legal framework; circulation of goods with minimal or no border controls; harmonization of standards for goods moved through the territory; an interconnected payment system; and collection of Customs duties at the first point of entry.

Adam Smith International and MA Consulting Group, affirm that a SCT in the EAC region would provide benefits such as fewer internal border controls and use of Rules of Origin, since it would not be necessary to test locally produced goods for compliance with origin conferring criteria.

There would also be no requirement for strict bond controls and there would be no need to track consignments to ports of destination, allowing for faster movement of goods and ultimately lowering the cost of doing business in the region.

A Single Customs Territory is an arrangement where two or more Customs territories merge to form one Customs territory.

In December 2010 the Summit of EAC Heads of State directed the Council of Ministers to expedite the process towards realizing a fully fledged Customs Union including studying the prospects for a Single Customs Territory.

A study was consequently commissioned in September 2011.

Source: The East African Business Week

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