TRA takes decisive action against counterfeiters, illicit traders as ETS tightens compliance, law enforcement efforts

BUKOBA, KAGERA: The Tanzania Revenue Authority (TRA) in the Kagera Tax Region has conducted a major operation to combat tax evasion involving the unregistered production of spirits in 100ml, 125ml, and 200ml quantities without proper registration, licensing, or affixation of Electronic Tax Stamps (ETS).

Approximately 25,433 bottles were seized in February 2025 during the operation, which was carried out by the Kagera Regional Office, under the leadership of Regional Manager Mr Castro John, in collaboration with Karagwe District Manager, Mr William Mneney.

As a result, the following tax evasion suspects were arraigned at the Resident Magistrate’s Court of Bukoba yesterday, March 24, 2025, on charges of violating the Excise Duty Act.

The four individuals who were arraigned due to this saga were identified as Mwesiga Reopard Rupia, Nelius Kaizelege Mwami, Julieth Ishengoma Kisheni and Mlokozi Egibert Emely

This follows TRA’s call for all businesses and traders in the country to comply with tax administration regulations and the Electronic Tax Stamps (ETS) system.

The use of counterfeit stamps fuels illicit trade, endangering consumers’ health, creating unfair business competition, and resulting in significant tax revenue losses that could otherwise be invested in social services, infrastructure, education, and healthcare.

For instance, in Tanzania, the illicit alcohol trade remains a serious and persistent problem, depriving the government of approximately 1.2 trillion Tanzanian shillings in uncollected excise duty annually.

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While the Tanzanian government acknowledges the contributions of compliant taxpayers and institutions, it is reaffirming its commitment to fostering a competitive business environment by cracking down on fraud and tax evasion.

This is being achieved through a modern tax administration system that optimizes enforcement efforts via market surveillance and advanced technology.

To combat illicit trade, the government has implemented several measures, including deploying dedicated enforcement teams and field inspectors to conduct audits from production to retail using specialized devices that verify product authenticity, recruiting 1,000 new TRA staff members to tackle illicit trade and smuggling of both locally produced and imported goods across the country and at its borders.

Other measures were introducing the Electronic Tax Stamps (ETS) system in 2019, enabling real-time monitoring of excisable products from production/import to retail sale and launching the Hakiki App, allowing consumers to verify the authenticity and quality of their purchases.

The Electronic Tax Stamps (ETS) system enhances tax enforcement by combining material and digital security features. Unlike digital-only solutions that are vulnerable to hacking or traditional paper stamps that can be easily counterfeited, ETS integrates banknote-level security features, making it nearly impossible to replicate.

Thanks to ETS, seizures of smuggled or counterfeit excisable goods in Tanzania have been successfully executed. The technology provides forensic evidence crucial for convicting fraudsters, with its security features serving as corroborative proof of illicit trade activities. This enables enforcement officers to seize illegal products, arrest offenders, and support legal proceedings against traffickers.

At a time when global trafficking and counterfeiting are on the rise, robust regulatory systems are crucial, particularly in multinational economic regions such as the East African Community (EAC). Secure trade facilitates economic growth by preventing exploitation of loopholes.

ETS-type systems are widely recommended by international organizations, including the World Health Organization (WHO) and the International Monetary Fund (IMF), for improving domestic revenue collection, combating illicit trade, and reducing tax evasion.

Through tax enforcement, technology, and compliance measures, TRA is reinforcing its commitment to transparency and fair business practices. By ensuring a level playing field, the authority seeks to empower the legitimate economy and drive sustainable economic growth in Tanzania.