THE government has directed a crackdown on foreign traders violating business regulations and take legal action to restore market balance

Dr Selemani Jafo, the Industry and Trade minister, issued this directive in Dar es Salaam yesterday in response to the findings of a committee investigating foreign traders in Kariakoo, ordering immediate action from relevant authorities to identify and prosecute foreign traders operating illegally, with a view to protecting local businesses.

The minister directed the Immigration Department, the Fair Competition Commission (FCC), the Police Force and the Tanzania Bureau of Standards (TBS) to launch a crackdown after the report revealed that foreign traders have monopolized the entire trade value chain in the market, with many operating without residence or business permits.

Prof. Edda Lwoga, the College of Business Education (CBE) rector and committee chairperson submitted its report to the minister, after the committee was set up on February 2 following a directive from President Samia Suluhu Hassan, in response to complaints from Kariakoo traders about unfair competition from foreign traders.

Investigation found that foreign traders control the entire trade chain, from importing goods to transporting and selling them, without involving local businesses, dominating the wholesale and retail sectors, including motorcycle spare parts, electronics, clothing, household appliances, decorations, and construction materials, she said.

Other sub-sectors under foreign control include clearing and forwarding, cargo transportation, customs services and lending services, the report intimated, highlighting that the committee inspected 75 shops in Kariakoo, where they discovered 152 foreign staff, with 148 (97percent) involved in retail sales, a branch of activity they identified as easily handled by local traders.

Investigation also uncovered that some foreigners were working or conducting business in areas outside the scope of their work permits, it said, with the committee chair noting that out of 106 foreign workers employed in 11 businesses, none were engaged in specialized roles as claimed, as most were working as ordinary technicians.

Foreign traders were also found to be undercutting local businesses by selling products at significantly lower prices, forcing many local enterprises to shut down. Additionally, some foreigners secured prime business spaces by outbidding local traders and making additional payments offhand.

The report also uncovered fraudulent business registration practices, with foreign-owned businesses being registered under Tanzanian nationals using their national ID (NIDA) and taxpayer ID (TIN).

For example, Garson Trading Co. which deals in motorcycle accessories was registered by locals but is owned by foreign nationals, identified as Jundong Huang and Ren Yunpeng.

The report also highlighted increasing online businesses as a tax evasion loophole as of the 29 online businesses inspected, none had valid licenses. Moreover, 80-percent of traders failed to issue receipts for purchases and one trader was found to have issued a forged receipt, confirmed by the Tanzania Revenue Authority (TRA), the report affirmed.