Tanzania Ports Authority (TPA) has explained the decline in cargo volume at the Dar es Salaam Port, attributing the situation to enhanced supervision aimed at controlling tax evasion. It, however, noted that despite the drop in cargo traffic, the port has continued to perform well in terms of revenue collection.
According to a TPA report presented recently to the Parliamentary Committee for Industry, Trade and Environment, between 2011/2012 and 2015/2016, the authority’s revenue collection increased by an average of 16.85 per cent per year.
In 2015/2016, a total of 694,383bn/- was collected, compared to 679,331bn/-, which was raised in 2014/2015. Dar es Salaam Port has been attracting cargo from the neighbouring landlocked countries of Zambia, Malawi, Burundi, Rwanda, Uganda, DRC and Zimbabwe.
TPA Director General Deusdedit Kakoko told the ‘Daily News’ in Dar es Salaam yesterday that the drop in cargo volume was not only being experienced in Tanzania but also in other countries such as Kenya and South Africa.
Mr Kakoko said that according to a report by TPA officials who visited the countries, the Port of Durban in South Africa registered a 10 per cent decline in cargo volume in the first quarter of this year while at Mombasa Port, it dropped by 1.5 per cent for the same period.
He cited China’s economic downturn as one of the reasons behind the decline of cargo volume in many ports, since 34 per cent of the world’s economy depended on the Far-East country.
The DG explained that cargo traffic at the Dar Port has decreased by 800,000 tonnes between 2014/2015 and 2015/2016. He added that despite the high volumes recorded in the past, some traders tended to evade from paying taxes thus denying the Authority revenue.
"It is true that cargo volume at the Dar es Salaam Port has dropped. But the situation has not affected our revenue collections because even with the high volume recorded in the previous years, TPA could not get its fair revenue because some traders were not paying taxes as required by law. We have strengthened supervision to ensure tax compliance," the DG said.
Mr Kakoko said, however, that the introduction of Value Added Tax (VAT) on transit cargo should not be considered as the main reason contributed to the decline in cargo volume at the port because the mechanism became effective in this financial year.
"The drop in cargo volume started to be experienced even before the introduction of VAT, although some traders may have decided to shun from using the port but this should not be regarded as the main reason for the drop in cargo volume because it became applicable in the past two months," Mr Kakoko noted.
The Tanzania Revenue Authority’s Director of Education and Taxpayers’ Services, Mr Richard Kayombo, told the ’Daily News’ that the drop in cargo volume involved mainly cargo for domestic consumption and to a lesser extent on transit cargo to DR Congo as fuel cargo and those on transit to Zambia and Burundi went up.
Mr Kayombo said that the government’s initiatives to control tax evasion loopholes at the port may be the main reason for the fall in cargo volume.
"It is obvious that revenue collection could drop with the decline in cargo volume but it has not been so ...it seems that traders who shunned using our port are the ones who were evading taxes," Mr Kayombo charged.
TRA statistics show that while cargo volume at Dar Port has dropped, customs revenue in 2015 ranged between 200bn/- and 300bn/- while in the period between December last year and August this year, the average of customs revenue per month has been between 400bn/ and 550bn/-.
Last week, the Parliamentary Committee for Industry, Trade and Environment said it plans to invite the Prime Minister, Mr Kassim Majaliwa, key stakeholders and ministries responsible for ports’ management to a meeting to find a solution to the decline of cargo volume at Dar es Salaam Port.