Customs and Excise Department is one of the revenue departments of the Tanzania Revenue Authority.
The Department has passed through various stages. Prior to the collapse of the East African Community which occurred i n 1977 the Customs and Excise Department was under the management of East African Community.
Thereafter the operations of Customs were transferred to the Ministry of Finance (Treasury) in July 1977.
In 1982 Customs and Excise Department was merged with Sales Tax Department to form one Department.
In 1996 the Customs and Excise Department was one of the three revenue-collecting Departments of the Tanzania Revenue Authority that were formed under the Tanzania Revenue Authority Act No 11 of 1995.
Commencing on 1st January 2005 the Department started implementing and applying the EAC legislations namely EAC Protocol and its Regulations, EAC Customs Management Act and its Schedules and the External and Internal Tariffs.
Objectives
The objective of the Department is to transform Customs into a modern Customs administration consistent with the TRA vision for a modern tax administration.
Types of taxes administered
Import Duty
This is the duty levied on CIF value of goods imported in to the country under the current three tariff bands of 0%, 10% and 25%. The zero rates are applied to Capital Goods to be used for investment and agricultural inputs. The 10% duty rate is applied in intermediary goods imported in to the country while the 25% rate is applied to finished goods.
Excise Duty on Imports.
Excise Duty is levied on seven items each having its own duty rate. The items are Beer, soft drinks, cigarettes, salon and station wagon cars with engine capacity exceeding 2000cc, plastic shopping bags, wine, mineral water and spirits and petroleum products.
VAT on Imports
The Value Added Tax is levied on all imports except the goods exempted by the VAT Act of 1997.
Fuel Levy
This is the tax levied on importation of petroleum products to the country and is specifically levied on two products only, which are Gasoline and Gas oil.
Initiatives implemented
Revision of duty rates
The duty rates applicable on the importation of the goods were revised to eliminate the aspect of overprotection of home industries and enable the consumers have the wide range of choice on the markets. The revision included the reduction of the duty rate on the importation of capital goods for the purpose of attracting investments in the country. The environment of equal playing ground was established to facilitate trade.
The phase out of Pre-shipment Inspection Scheme (PSI)
The Pre Shipment Inspection system, which was in place, formed a long chain of the bureaucracy where by the importer had to have the goods inspected before being shipped to the country. The program ended in 31st December 2003 and the Department introduced Destination Inspection (DI) Program in July 2004. Under DI documentary verification of importers declaration is performed here in Tanzania and for those selected consignments requiring physical verification are inspected upon arrival in the country. Along with DI, X-ray container scanning was initially introduced for examining imported containerized cargo. Scanners have been installed at KICD, JKNIA and other few selected stations to speed up clearance of goods.
Introduction of ACV
The system used in valuation of good was changed from BDV to ACV and become in line with the requirements of WTO. The introduction of this system of valuing the imports was introduced in January 2001.The use of the WTO agreement on Customs valuation has increased the level of compliance in payment of taxes. The importers can now determine in advance exactly amount of taxes they are required to pay on their transactions.
Introduction of Post Clearance audit
As part of its efforts of facilitating trade, TRA through its Customs administration, introduced the Post Clearance Audit Program on 1st July 2003 aimed at, among other objectives, the enabling of goods to be cleared within a shortest time as possible.
Modernization and simplification of customs processes
International Trade and transport operations are in these days been computerized making it necessary for our Customs administration to be computerized. The computerization of the Department is going on and since 1st July 2004, TRA, through its Customs and Excise Department, has been in the process of migrating from ASYCUDA version 2.7 to ASYCUDA++.
Transit goods
The Department makes minimum intervention on transit goods. Some of the Clearing Agents selected by the Land locked Countries are accorded concession with regard to the requirement of the bond security in the whole process of simplification of the movement of transit goods. A number of dry ports have been established to movement of transit goods e.g. MCC for Malawi Isaka Dry Port for Rwanda, Democratic Republic of Congo and Burundi and the process are underway to open Makuba for transit goods to Zambia. Transit control module in ASYCUDA++ has facilitated the monitoring of transit goods.
Use of bonded warehouses
The business community operates a number of Bonded warehouses with the aim of enabling them to re export or Manufacture under Bond the goods without paying the duties. The system also enables the business community to have their capital not tied up on payment of duties.
Facilitate exportations of goods
The Department has also been given a task of promoting exports by making sure that the duty element paid on the importation of the raw materials is refunded or not paid to have the exports competitive in the world market.
Examination of goods
For the purpose of facilitating quick clearance of good the not all the imported goods are physically examined. The risk profile has been built to have the decision on whether the goods are to be examined or directly released.
