Loopholes in online cash transfers cut govt revenue

Tanzania Revenue Authority commissioner general Rished Bade gestures during a recent interview with The Citizen. PHOTO|SALIM SHAO      

By Ludger Kasumuni, The Citizen Reporter

In Summary

“Some customers in the past had their money refunded by the relevant banks but after they were accused by the banks to have stolen their own money and refusing to take responsibility. 

Dar es Salaam. The government is losing billions of shillings from corporate sources of taxes due to online bulk cash transfer system that has loopholes for cybercrimes, according to banking lawyer Hawa Sinare.

Dr Sinare told The Citizen yesterday that she had corporate customers who had payments of billions of shillings meant for the Tanzania Revenue Authority (TRA) but were stolen through online cash transfers.

“Some customers in the past had their money refunded by the relevant banks but after they were accused by the banks to have stolen their own money and refusing to take responsibility.

But what is happening now is unprecedented,” said Dr Sinare who is an advocate with Rex Consulting Ltd.

Without revealing the names of those commercial banks she said: “It is unprecedented because weaknesses in some of online banking systems by some of the banks and weaknesses in detecting payments of large sums of money could be exploited by terrorists or criminal elements.

“Billions of shillings meant for TRA have been stolen in three-way syndicates involving a customer’s employee instructed to effect online banking transactions, the banks and TRA. Through this way billions of shillings are stolen before the customer and TRA are aware of the theft.”

She urged the Bank of Tanzania (BoT) to revamp the online cash transfer system so that the leakages of public funds are curbed. BoT on Monday issued a statement that it had established a special desk to handle complaints from customers who face theft of funds through online cash transfers.

According to BoT investigations director Mustafa Ismail, the complaints filed to the regulator within 14 days will be handled but the maximum amount of funds claimed should not exceed Sh15 million.

Mr Ismail said in a statement that the complaint should be referred to other bodies like the High Court’s Commercial Division.