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THE Zimbabwe Energy Regulatory Authority and the Zimbabwe Revenue Authority will chemically “mark” imported fuel to identify and eliminate smuggled petroleum products, most of which are sub-standard. Zera’s quality tests indicate that some of the fuel on the market is of poor quality and in some cases it is mixed with illuminating paraffin.
More than 20 retailers selling contaminated fuel have been prosecuted since January 2016. The move by Zera to enlist Zimra comes in the wake of increased reported incidences of cartels dumping fuel – purportedly destined for other countries in the region – on Zimbabwe’s market.
The cartels, understood to be well-resourced, are believed to be capitalising on delays by Zimra in rolling-out an electronic cargo tracking system. Zera acting CEO Engineer Misheck Siyakatshana told The Sunday Mail Business last week that the authority had unearthed cases of poor quality fuel during quality monitoring programmes.
“The quality of fuel cannot be guaranteed because it’s handled through unorthodox means. Zera has picked cases of poor fuel quality in its fuel monitoring programme in cases where retailers are adulterating diesel with duty free illuminating paraffin.
“Zera, working with the Zimbabwe Republic Police, has successfully prosecuted over 20 such cases so far this year.
“The authority is currently working with Government and Zimra on a programme that will chemically ‘mark’ fuel that has paid duty and this will enable the authority to detect fuel that has evaded duty in its fuel surveillance in the market,” said Eng Siyakatshana.
It was not possible to determine the exact amount of fuel that is being smuggled into Zimbabwe, and Zimra board chair Mrs Willia Bonyongwe had not responded to questions from this newspaper by the time of going to print.
In the first quarter of 2016, Zimra reported revenues generated from excise duty at US$160,5 million against a target of US$179 million.
At 79 percent, excise duty on fuel was the biggest contributor to the tax head, followed by excise duty on beer and cellphone air time, which contributed nine and 6,1 percent respectively.
Excise duty on tobacco, wines and spirits, second-hand motor vehicles, and electric lamps contributed the balance.
Said Zimra in its first quarter statement: “The performance of the revenue head can be attributed to a reduction in the volumes of fuel imports. The decline could also be partly ascribed to fuel transit fraud and smuggling as signified by a proliferation of illegal service stations during the period under review.”
An electronic cargo tracking system will enable authorities to monitor real time movement of trucks in Zimbabwe to deter transit fraud.
Government, in the 2010 National Budget, directed Zimra to introduce “advanced enforcement methods in order to curb transit fraud”. Zimra is yet to implement proposed measures.
Government wants an electronic cargo tracking system that uses electronic seals and transmitters to monitor transit cargo so as to minimise revenue losses arising from the offloading of cargo that would not have paid duty. Addressing staff at Chirundu One-Stop Border Post on June 17, 2016, Zimra Acting Commissioner-General Mr Happias Kuzvinzwa said plans to introduce a state-of-the-art cargo tracking system were at an advanced stage.
“However, I must hasten to say technology might not be the solution to the problems we face, because it has got its own loopholes and experience has taught us that. What we need is to make the manual system works perfectly well, such that technology will come in to enhance our effectiveness,” said Mr Kuzvinzwa.
Critics argue that the multiple taxes levied on fuel imports make it difficult for some players to comply.
For example, importers – over and above ordinary administrative expenses – must pay excise duty, a road levy, carbon tax, debt redemption levy and a strategic reserve levy.
Online Reporter