ZIMRA must get to the bottom of fuel smuggling

Zimbabwe Revenue Authority (ZIMRA)’s decision to tighten oversight of the fuel sector was long overdue.

ZIMRA latest crackdown on fuel companies is a critical test of the country’s resolve to dismantle one of the biggest sources of revenue leakages and restore integrity to a strategic sector of the economy.

Fuel is among Zimbabwe’s largest import commodities and one of the Treasury’s most significant sources of tax revenue. Every litre that enters the country without the requisite duties being paid represents money diverted from public services, infrastructure development and national economic priorities. In an economy where every dollar counts, the scale of these leakages is simply unacceptable.

The introduction of a digital monitoring system capable of tracking fuel from border posts through storage depots to the dispensing pump is a welcome development.

If fully implemented, the Fiscalisation Data Management System has the potential to close loopholes that have for years enabled under-declaration, diversion and outright smuggling of fuel.

Fuel smuggling has persisted because it is often driven by organised networks that exploit weak enforcement, regulatory gaps and, in some cases, corruption.

ZIMRA must therefore ensure that the new system is backed by robust investigations, intelligence-led enforcement and swift prosecution of offenders.

Those found guilty must face meaningful penalties that outweigh the profits of tax evasion.

Equally encouraging is the Zimbabwe Energy Regulatory Authority’s move to tighten licensing requirements and suspend new urban fuel station approvals while regulations are reviewed.

A well-regulated downstream petroleum industry is essential not only for tax compliance but also for public safety, fair competition and orderly investment.

Government agencies must now work as one. ZIMRA, ZERA, law enforcement authorities, border agencies and local authorities should share information seamlessly to eliminate opportunities for illicit trade. Fragmented regulation only benefits smugglers.

Legitimate fuel operators also have a responsibility to embrace transparency. Businesses that comply with tax laws should welcome measures that level the playing field by removing unfair competition from unscrupulous operators who evade duties and undercut compliant businesses.

Zimbabwe cannot afford to lose millions of dollars through fuel smuggling while simultaneously seeking resources to finance economic growth and public services.

This latest crackdown must therefore mark the beginning of sustained enforcement rather than a short-lived campaign.