Imagine a nation's economic development blueprint being realized through precision customs operations. Tanzania is currently demonstrating this vision in action. Facing the dual challenges of trade facilitation and tax collection, the Tanzania Revenue Authority (TRA) is actively seeking breakthroughs, with strong support from the World Customs Organization (WCO) injecting powerful momentum into this transformation.
Strategic Framework: People-Centric Approach to Enhance Revenue Capacity
Under the framework of its fourth Corporate Development Plan, TRA has placed human capital development at its core, aiming to "consistently increase revenue while steadily improving compliance levels." This isn't merely a slogan but reflects a profound understanding of the nation's economic lifeline. An efficient customs system ensures timely and complete collection of due taxes, providing solid financial support for socioeconomic development.
WCO Partnership: Tailored Capacity Building Initiative
To achieve these goals, TRA has partnered with WCO to launch a two-year capacity building project funded by the Norwegian Agency for Development Cooperation (Norad). The initiative focuses on enhancing TRA staff's professional skills in commodity classification and valuation while strengthening related infrastructure. Beyond Tanzania, the project will benefit Liberia, Mozambique, Nicaragua, Rwanda, Timor-Leste, and Vietnam.
Core Innovation: Trainer Development for Sustainability
A highlight of this project is its "train-the-trainer" program. By cultivating internal trainers within TRA, the initiative ensures continuous knowledge transfer and skill development. This approach provides more than temporary WCO support—it establishes a self-sustaining training system that lays solid groundwork for future progress.
The project specifically focuses on enhancing technical knowledge of commodity classification and valuation for experts and post-audit personnel while creating effective training frameworks for non-specialists. Additionally, TRA will collaborate with WCO to explore implementing a binding tariff information publication program, offering clearer guidance to businesses and reducing trade uncertainties.
Data-Driven Transformation: Developing Risk Assessment Tools
Beyond personnel training, WCO will mobilize expert resources to assist TRA in developing customized databases that double as risk assessment tools. This marks TRA's transition from traditional experience-based judgments to data-driven scientific decision-making in customs administration. Through in-depth data analysis, TRA can more accurately identify high-risk shipments and businesses, thereby improving regulatory efficiency and combating smuggling and tax evasion.
Public-Private Collaboration: Building Bridges for Trade Facilitation
Recognizing that trade facilitation requires active private sector participation, TRA plans to involve business representatives in awareness campaigns and training programs. This approach helps build trust between customs authorities and compliant businesses while facilitating knowledge and experience sharing. By establishing communication channels, TRA aims to better understand business needs and deliver improved services, jointly advancing trade facilitation.
Laboratory Development: Strengthening Commodity Classification
To further enhance commodity classification capabilities, TRA is conducting feasibility studies for customs laboratories with WCO's technical support. TRA envisions establishing dedicated laboratories to conduct direct commodity analysis, providing scientific basis for classification. In preparation, TRA hosted a WCO Customs Laboratory Workshop in Dar es Salaam from February 11-14, 2013, supported by Japan's Customs Cooperation Fund.
Expert Engagement: On-Site Assessment for Customized Solutions
From February 4-8, 2013, a WCO expert team conducted field studies in Dar es Salaam to develop tailored support programs for TRA. Coordinated by TRA's Trade Facilitation and Procedures Department, these assessments were conducted under the auspices of the TRA Commissioner General's office.
Leveraging Global Expertise: Building Efficient Revenue Systems
WCO will apply lessons from its Revenue Package initiative to support TRA. This program helps customs administrations identify and collect legally due revenues. WCO has also developed new guidelines focusing on practical application of WTO Valuation Agreements and establishing effective tariff classification infrastructure.
Technical Foundations: Understanding HS Codes and Classification
The Harmonized System (HS) of commodity classification serves as the global standard for trade categorization. Maintained by WCO and adopted by most nations, HS codes are crucial for determining tariffs, trade statistics, rules of origin, and trade policy implementation. Customs officers must master accurate classification to ensure proper revenue collection and smooth trade flows.
The six-digit HS code structure begins with two digits denoting the section, followed by two-digit chapter identifiers and two-digit heading numbers. Countries may add supplementary digits for more detailed classification—China uses eight-digit codes while the EU employs ten-digit versions.
Classification Principles and Challenges
Classification follows principles outlined in the Harmonized System Explanatory Notes, which carry legal authority. Key principles include examining goods holistically (the "whole goods" principle), classifying by dominant characteristics, considering intended use, and comparing with similar listed items.
Challenges persist with complex mixtures, multi-purpose goods, and rapidly evolving technologies. Differing interpretations among national customs administrations may also yield varying classification results.
Customs Valuation: Ensuring Fiscal Equity
Customs valuation—the process of determining imported goods' value for duty calculation—directly impacts revenue fairness and trade efficiency. The WTO Customs Valuation Agreement establishes six hierarchical valuation methods:
1. Transaction value method (actual paid price)
2. Identical goods method
3. Similar goods method
4. Deductive value method
5. Computed value method
6. Fallback method (when others prove inapplicable)
Tanzania's Comprehensive Strategy
To address valuation challenges—including price misdeclaration and sophisticated evasion tactics—TRA has implemented multifaceted solutions: intensive officer training, comprehensive valuation databases, and strengthened international cooperation. These measures collectively enhance valuation accuracy and efficiency while ensuring equitable revenue collection.
Conclusion: Forging a Prosperous Trade Future
The TRA-WCO collaboration transcends a capacity-building project—it represents a nation embracing global trade as an engine for economic advancement. By strengthening HS classification and valuation capabilities, Tanzania positions itself for deeper global economic integration, increased investment, and expanded trade that benefits all citizens. WCO's support provides crucial scaffolding for this transformative journey.
Customs authorities serve not merely as border guardians but as economic accelerators. With WCO partnership, Tanzania moves steadily toward establishing a more efficient, equitable, and transparent customs framework—one that will power national prosperity for years to come.