Tanzania: Fuel Tax System Curbs Evasion

Dar es Salaam — A PETROLEUM importation and distribution company, MOIL Energies, has expressed satisfaction with the introduction of a new fuel tax payment system that requires taxes to be paid before fuel is released to the market, saying it has significantly curbed tax evasion practices that existed previously.

Speaking in Dar es Salaam, company's General Manager, Dr Sajad Habib Rai, said the Bulk Importation Levy (BIL) system has improved transparency and efficiency in the petroleum sector.

He noted that MOIL Energies was among the first companies to propose the introduction of the system to the Energy and Water Utilities Regulatory Authority (EWURA) and the Petroleum Bulk Procurement Agency (PBPA), before it was later officially implemented by the Tanzania Revenue Authority (TRA).

"We are pleased to see that TRA is effectively managing this system, as it prevents tax evasion that was previously carried out by some traders. Now the government receives its revenue earlier, before the fuel enters the market," said Dr Sajad, who also serves as Resident Manager of Mansoor Industry Limited. Recently, TRA officially announced the rollout of the system, which is expected to boost government revenue by curbing losses associated with fuel import taxes.

Through the new system, every fuel importer is required to declare the quantity of fuel brought into the country, while the Tanzania Bureau of Standards (TBS) applies special chemical markers to identify each importer and track volumes for accurate tax assessment.

Dr Sajad said the system benefits compliant traders by ensuring fair competition in the market. He added that the arrangement also streamlines fuel distribution, ensuring timely delivery to consumers while preventing fuel meant for export from being diverted into the domestic market.

Meanwhile, speaking during a recent visit to fuel storage depots in Dar es Salaam, TRA Commissioner General, Mr Yusuph Mwenda said the system aims to simplify business operations and eliminate challenges that previously existed.

He called on traders facing any challenges to engage with TRA, adding that the authority has also introduced 24-hour services to speed up service delivery for taxpayers involved in fuel importation, distribution and sales.

Read the original article on Daily News.