Treasury has launched a series of investigations aimed at fishing out fuel industry cartels accused of misrepresenting import data to dodge taxes, officials said this week.
The cartels, who are suspected to be driving the rise in the number of new service stations in Zimbabwe, were said to be submitting paperwork which indicate that cargo would be in transit.
Fuel is then offloaded in Zimbabwe before trucks are filled with water and dispatched to cross the borders again.
Goods in transit are not eligible to pay taxes. Countries being cited as destinations for illicit transactions include Zambia and Democratic Republic of Congo (DRC).
Zimbabwe Energy Regulatory Authority (Zera) chief executive officer, Eddington Mazambani this week said he was not privy to the impending crackdown.
“Issues of duty are dealt with by the Ministry of Finance through the Zimbabwe Revenue Authority (Zimra),” Mazambani said.
“Zera will not be privy to any such arrangements. South Africa is one of our suppliers of fuel, especially for the southern parts of the country. If there are issues of misdeclaration of destinations at ports of entry Zimra should answer that.”
But well-placed sources said delinquency had reached alarming levels, with officials in state agencies at borders among those driving corrupt deals.
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Treasury sources said the Ministry of Finance had been monitoring the situation, with new measures to nail culprits set to be unveiled as early as next week.
“Treasury has launched a probe after intelligence agencies raised them,” a government source close to the investigation said.
“Fuel cartels have been falsifying the destination of cargoes, evading duty and other related fees.
“The country has lost millions of US dollars in potential revenue. The situation can be explained better by the recent sprouting of indigenous fuel companies, which have been benefitting from this scam. As early as next week there will be action.”
George Guvamatanga permanent secretary in the Ministry of Finance, did not respond to questions sent to his WhatsApp.
A former deputy minister in the ministry of finance was in 2017 sucked into the water-fuel scandals after four of his fuel containers were intercepted by Zimra at Chirundu Border Post, suspected of carrying water, instead of fuel bound for the DRC.
Zimra conducted a physical search on the trucks and discovered that their seals had been tampered with.
The trucks were then found loaded with 140 000 litres of water, instead of diesel.
The Independent understands that Treasury had zeroed in on one cartel, which has been importing fuel from South Africa at lower prices, before diverting it to service stations in that country.
Treasury in collaboration with law enforcement agencies, was said to have also launched a probe into circumstances surrounding the way fuel importation licences were being awarded.
“If you make your own investigation, you will see that the majority of socialites flaunting their wealth all have fuel import licences,” the Treasury source said.
“Fuel acquired through these licences never reaches the Zimbabwean market, even if records show that the fuel would have been acquitted at Beitbridge Border Post, meaning it would have crossed into Zimbabwe. The fuel is rather imported but still sold within the South African market,” another Treasury source said.
At least 42 local fuel companies were in 2021 asked to explain their dealings to the Zimbabwe Anti-Corruption Commission (Zacc) after reports linked them to illicit transactions involving fuel shipments to Zambia and the DRC.
Zacc gave the companies an ultimatum to submit all papers relating to petrol and diesel imports between January 2018 and December 2019.
Big firms have also been implicated in the fuel smuggling racket.
“Several fuel companies are under-declaring their product at ports of entry where a 30 000-tonne truck declares 25 000 litres yet it will be full. The remaining 5 000 litres is not declared. Zimra officials are also part of the syndicate.
“Treasury is investigating these allegations in collaboration with other government agencies in order to plug leakages. The country is losing revenue and those supposed to be collecting the revenue are now accomplices to the crimes,” the source said.
The Independent was also informed that Treasury had also launched another probe into allegations that some fuel companies were not adhering blending requirements.
“There are companies which are not adhering to prescribed blending ratios. This is something that Treasury is also investigating,” the source said.