Fraud ‘costs Dar almost 2tr/- annually’

Mr Kitilya
Tanzania loses the equivalent of about five per cent of its gross domestic product to fraud annually, according to the Tanzania Revenue Authority (TRA).
Tanzania’s current GDP is about 23 billion US dollars (about 36.8tr/-), and this translates into a loss of 1.15 billion US dollars (1.84bn/-) annually.

TRA Commissioner General Harry Kitillya said yesterday that fraud had been adversely affecting the authority’s capacity to collect revenue to match the country’s increased demand for funding for social services and various economic sectors.

“The country has been losing huge sums of money through fraud every year. There is a need to institute proper controls to prevent fraud,” he said at an awareness seminar for the media organised by the Association of Certified Fraud Examiners (ACFE).

The TRA boss said major forms of fraud included those related to tax collection violations, health insurance, documentation and identity, adding that the world economy lost 3.5 trillion US dollars to fraud last year.

“Fraud is a problem all over the world. Occupational fraud affects all institutions. It is estimated that almost five per cent of the annual revenue of every institution is lost to fraud,” Mr Kitillya said.

He added that TRA had worked out control measures against fraud using Information Communication Technology (ICT) devices to be installed by next January.

The ACFE-Tanzania Chapter board chairman, Mr Lusekelo Mwaseba, said fraud was a serious threat to small and medium enterprises (SMSs) because they had weak control mechanisms.

Fraud was prevalent worldwide in banking operations, financial deals, procurement and manufacturing, he said, adding that people who were most likely to commit fraud were those involved in accounts, sales, executive operations and customer service.

Mr Mwaseba commended TRA for investing in fraud prevention by training half of fraud examiners in the country, which has a total of only 75 such experts.He said the media faced great challenges in uncovering fraud, as it took place in secrecy and posed a high risk to media practitioners.

A lecturer at the Institute of Journalism and Mass Communication of the University of Dar es Salaam, Dr Ayoub Rioba, said fraud was present in almost all sectors, including the media.He urged the government to transform Tanzania Broadcasting Corporation (TBC) into a public service media organisation as a way of stepping up the fight against fraud.

“Once the capacity of TBC to uncover fraud is enhanced, media houses in the private sector will follow suit as they seek to compete in coverage,” Dr Rioba said.The Chief Executive of ACFE-Kenya, Ms Jane Wambui Mugo, said global prevalence and sophistication of fraud were on the rise.

“In almost every organisation there are incidences of fraud. Fraud is hidden and usually up to 80 per cent of employees in every organisation perpetrate frauds,” she said.Ms Mugo added that the more one stayed in an organisation, the more he or she became susceptible to fraud.
Source: The Citizen, , reported by Ludger Kasumuni in Dar es Salaam

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