Tanzania: Govt to Auction Nearly 1,000 Tonnes of Abandoned Sugar
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Posted on :Saturday , 3rd September 2016
Tanzania is to auction thousands of tonnes of brown sugar abandoned at the Dar es Salaam port by importers reportedly fearing President John Magufuli's tax crackdown.
The Tanzania Revenue Authority (TRA) has put the consignment in 44 containers for auction in the first week of October should its owners fail to show up and claim the cargo in 30 days.
A notice issued through the media on Wednesday listed the brown sugar containers among several other items that have overstayed at the port without being claimed.
But unlike all the other products, TRA did no list in the notice, the names of the companies that imported the sugar nor the consignees. The tax agency did not also divulge the quantity of the said sugar.
However, sources at the port say there could be about 1,000 tonnes of the sugar with an estimated value of between Tsh2 to Tsh3 billion ($900-1,400).
"Sugar is usually imported in 50kg bags in 20ft containers that carry between 20 to 23 tonnes each. Therefore with 44 containers, the quantity should about 1,000 tonnes of sugar," explained the source. With a kilogramme of the sugar currently costing some Tsh2,500 ($1.15), the 1,000 tonnes could therefore fetch some Tsh2.5 billion ($1,150) in the market.
Other sources said the sugar belongs to a Dar es Salaam-based businessman with varied interest in manufacturing. The sources said the sugar has been withheld since late last year over a tax dispute, coming soon after the newly elected President Magufuli suspended sugar imports and ordered a crackdown on tax cheats.
The ban which saw the government import the commodity through the sugar board following a biting shortage thereafter, has since been loosened with imports allowed albeit with stringent scrutiny.
According to the details, TRA has withheld the consignment on the basis of a dispute over import declaration. The taxman claims the sugar had been labelled as industrial instead of domestic sugar. Industrial sugar attracts less import duty.
On Wednesday, the Commissioner for Customs and Tariffs Mr Jocktan Kyamuhanga said they will auction the sugar and other products between October 3-10. He stressed that if the owners of the sugar do not clear it before then it would be sold as deemed fit by the government.
TRA Director for Taxpayer Services and Education Mr Richard Kayombo said they had put up the advertisement to smoke out the owners to pay the correct tax owed to the government.
"We can't disclose the amount or the names of the owners as our aim is to get them to come and pay for the tax they owe us," he said.
Tanzania Freight Forwarders Association (Taffa) Vice President Edward Urio said the law allows the taxman to auction goods that have overstayed at the port for more than 21 days.
"Normally if the owner decides to collect the consignment one day before the auction, TRA stops its sale," he noted.
He was of the view that maybe the consignment was abandoned by unscrupulous businesspeople who in the past imported sugar and lied that it was on transit in order not to pay taxes.
He said it was currently not easy to dump transit cargo while the large volume of the sugar meant more charges storage fees. "It is not surprising that the owners may opt to buy the same consignment through the auction."
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