business journalist

The Zimbabwe Revenue Authority (Zimra) has seen improved tax compliance through its new Electronic Cargo Tracking System (ECTS), which has improved monitoring of taxpayers and cargo transiting the country.

This is contained in a report published by the World Economic Forum (WEF) in its report entitled Growing Intra-African Trade Through Digital Transformation of Border and Customs Services, focused on the African continent.

According to the WEF report, in the first year of using ECTS, the tax regulator in Zimbabwe managed to intercept a significant number of freight fraud cases while the number of new tax registrations registered increased significantly .

“Four tankers which entered Zimbabwe with 140,000 liters of diesel have been arrested after it emerged that while they were supposed to be in transit to the DRC their contents had been illegally emptied in Zimbabwe and replaced by an equivalent volume of water, this saved Zimbabwe US$55,650 in excise duties during the month of the incident,” the WEF said in its report.

Zimra’s tax monitoring and collection capabilities were reportedly enhanced, resulting in the registration of 3,232 new taxpayers while the system detected irregularities that resulted in 106 cases being referred for verification.

After a series of frauds and tax evasion, in 2017, Zimra, with the support of the African Development Bank (AfDB and Techno Brain, introduced ECTS to curb dumping incidents and reduce the operational cost of monitoring the transit and strengthen enforcement of cargo handling regulations.

Economist Namatai Maeresera said: “The ability to move goods quickly at a sustainable cost helps build and strengthen regional value chains by increasing the incentive to source raw materials, intermediates and products. finished in a specific region, as these items can be obtained at competitive prices.”

Zimra’s ECTS system uses 21 geo-fenced transit routes covering all major commercial cargoes such as breakbulk, containerized cargo and road tankers. It is also integrated with the existing ASYCUDA (Automated Systems for Customs Data) global portal.

“If businesses feel safe transporting goods on your roads and railways, it will help the country to earn much-needed revenue from road user fees.

“It also means the country can now effectively track its revenues through the systems and the days of unloading and replacing goods in transit are over,” Maeresera added.

According to the WEF, prior to the introduction of ECTS in Zimbabwe, there was widespread dumping of illegal imports into the country’s domestic markets, due in part to the lack of an effective cargo tracking mechanism.

“At the time, only transit data was available in the system and as a result other data was tampered with and transit delays often occurred, as well as incidents of theft and smuggling. For example, between 2009 and 2016, gasoline and diesel smuggling increased by almost 600%, and it is alleged that smugglers often disguised gasoline and diesel in duty-free paraffin,” the organization said. .

The use of electronic sealing devices attached to cargo in transit at entry points has enabled real-time tracking and monitoring of cargo in transit from the point of entry into the country to the point of exit.

“These electronic seals are linked to the designated ECTS control room, which reports any breach or tampering to Zimra’s emergency response teams for corrective action, which may include seizure of cargo or penalties depending on the nature of the breach. the offence,” the WEF said.