1. ASSESSING THE SYNCHRONISATION OF CUSTOMS AND
POSTAL SERVICES IN MEETING THE VISION OF
SWAZILAND REVENUE AUTHORITY (SRA).
Author: Jabu Agreeneth Matse
Student ID: 2118767
A Research Dissertation submitted towards fulfillment of the
Associate Degree in Business Administration
of the Institute of Commercial Management (ICM), United Kingdom.
Date of Submission: December 2013
Signed: ………………………
Student ID: 2118767
Author
Signed: ………………………
Employer/Supervisor

2. EXECUTIVE SUMMARY
The economic growth of the Kingdom of Swaziland has not been satisfactory over the years due
to a variety of factors. One such notable factor is the inadequate sources and amount of public
revenue to steer infrastructure development, public-private sector investment, human capital and
technology improvement. In order to increase public revenue, the government through the
Revenue Authority Act of 2008, formed the Swaziland Revenue Authority (SRA) in 2010 in
order to streamline and increase efficiency in tax revenue collection.
The study focused on analyzing the operations of SRA-Customs and Swazi Post with the aim of
synchronizing the same to improve the efficiency of revenue assessment and collection. Swazi
Post was selected for the study as a major stakeholder that may affect the effectiveness and
efficiency of revenue assessment and collection.
The study employed both qualitative and quantitative methods to collect and analyze research
data. Interviews, Field observations and secondary methods were used which was analyzed and
discussed in relation to the objectives of the study. The main sources of data for the study
included senior management, supervisors and the field staff of both SRA-Customs department
and Swazi Post, all of whom provided useful information.
The study identified a number of issues that affect the operations of both Customs and Swazi
Post and therefore have a negative setback on the effective and efficient collection of tax
revenue. These included among others: lack of MOU between SRA-Customs and Swazi Post;
poor customs control points; inadequate staffing; inadequate technology; non-compliance; lack
of adequate reconciliations; and conflicting roles and responsibilities.
The study report concludes by highlighting major recommendations which if implemented could
improve the operations and collaborative arrangements between SRA-Customs and Swazi Post.
The recommendations aim at streamlining and increasing efficiency in tax revenue collection
hence contributing to SRA’s vision. The improvement of customs control points, modernization
of systems, education and awareness campaigns, staffing compliment and timely reconciliations
are some of the recommendations highlighted by the study report.

3. ACKNOWLEDGEMENTS
The successful completion of my work leaves me indebted to the Swaziland Revenue Authority,
my family, supervisor, friends and colleagues. I take this opportunity to acknowledge the SRA
and Swazi Post for providing me opportunity and allowing me the opportunity to conduct the
study and collect data without which this study would not have been accomplished.
I would like to pay my respectful gratitude for my esteemed supervisor Rogers Mugisha
(Lecturer at Oxford Business Institute-Swaziland) for the keen interest and invaluable guidance
rendered to me under whose able guidance and motivation, this study has been undertaken from
its conception to its completion. I am grateful to him for being a constant source of
encouragement and inspiration and without whom this journey would have been a figment of
imagination.
This study would not have been accomplished without the blessings and support of my family
who encouraged me throughout the study.
I would like to thank all the staff of SRA-Customs department and Swazi Post who gave
valuable time for interviews and vital information for the completion of this study report.

4. LIST OF ABBREVIATIONS
ASYCUDA: Automated System for Customs Data
AGOA: African Growth Opportunity Act
COMESA: Common Market for Eastern Southern Africa
EFTA: European Free Trade Area
IRAS: Integrated Revenue Administration Systems
ICT: Information, Communication and Technology
IT: Information Technology
ICD: Inland Container Depot
MBO: Management by Objectives
SACU: Southern African Customs Union
SADC: Southern African Development Community
SRA: Swaziland Revenue Authority
VAT: Value Added Tax
E: EMALANGENI: £1.00 = E15.00

5. Table of Contents
EXECUTIVE SUMMARY .........................................................................................................................................................2
ACKNOWLEDGEMENTS ........................................................................................................................................................3
LIST OF ABBREVIATIONS.....................................................................................................................................................4
1.0 INTRODUCTION ..........................................................................................................................................................6
1.1 CORPORATE PROFILE...................................................................................................................................................6
1.2 BACKGROUND TO THE STUDY.....................................................................................................................................8
1.3 JUSTIFICATION OF THE STUDY.....................................................................................................................................9
1.4 PURPOSE AND OBJECTIVES OF THE STUDY................................................................................................................9
2.0 SITUATION ANALYSIS ..........................................................................................................................................10
2.1 THE CUSTOMS DEPARTMENT OF SWAZILAND REVENUE AUTHORITY (SRA)..................................................10
2.1.1 SRA-Customs Organogram.................................................................................................................................10
2.1.2 Operating Hours at borders in Swaziland .......................................................................................................11
2.2 THE SWAZI DOMESTIC ECONOMY...........................................................................................................................11
2.3 INLAND CUSTOMS STATIONS...................................................................................................................................13
2.4 CUSTOMS SERVICES AT SWAZI POST......................................................................................................................14
2.4.1 Overseas parcels...................................................................................................................................................14
2.4.2 Parcels coming South Africa..............................................................................................................................16
3.0 RESEARCH METHODOLOGY ............................................................................................................................18
3.1 DATA COLLECTION....................................................................................................................................................18
3.2 SOURCES OF DATA.....................................................................................................................................................18
3.3 DATA ANALYSIS........................................................................................................................................................19
4.0 RESEARCH FINDINGS AND DISCUSSIONS ..................................................................................................19
4.1 CUSTOMS OPERATIONAL PROCEDURES..................................................................................................................19
4.2 SWAZI POST PARCEL HANDLING SYSTEMS...........................................................................................................22
4.3 COLLABORATIVE ARRANGEMENTS.........................................................................................................................22
4.4 NON-COMPLIANCE....................................................................................................................................................24
4.5 HEALTH AND SAFETY ISSUES...................................................................................................................................24
5.0 CONCLUSIONS AND RECOMMENDATIONS ...............................................................................................24
5.1 THE IMMEDIATE EFFECT OFTHE STUDY..................................................................................................................24
5.2 CUSTOMS CONTROLS POINT ....................................................................................................................................25
5.3 SUGGESTED MOVEMENT OF PARCELS....................................................................................................................25
5.4 MODERNIZATION OF SYSTEMS.................................................................................................................................26
5.6 IMPROVING STAFF COMPLIMENT ............................................................................................................................27
5.7 COMPLIANCE ENHANCEMENT..................................................................................................................................28
5.8 HEALTH AND SAFETY MANAGEMENT ....................................................................................................................28
5.9 MANAGEMENT BY OBJECTIVES (MBO) .................................................................................................................28
LIST OF REFERENCES .........................................................................................................................................................29
APPENDIX I: LIST OF PICTURES ..............................................................................................................................30

6. 1.0 Introduction
1.1 Corporate Profile
The Swaziland Revenue Authority (SRA) is a semi-autonomous agency which is responsible for
assessment and collection of all tax revenue on behalf of the Swaziland Government. SRA came
into effect in 2010 through the Revenue Authority Act of 2008 and formally took over the
responsibility of revenue administration on 1st January 2011, initially taking over Tax and
Customs administration from the Government.
The operations of SRA are overseen by a Governing Board which comprises of; a Chairman, the
Principal Secretary in the Ministry of Finance, the Principal Secretary in the Ministry of
Commerce, Industry and Trade, the Governor of the Central Bank of Swaziland, three other
members appointed by the Minister and the Commissioner-General (ex-officio).
Swaziland Revenue Authority administers a wide range of legislation related to tax and customs
administration. There are currently three operational departments:
 Income Tax,
 VAT formerly known as Sales Tax
 Customs & Excise
Vision and Mission Statement
The Vision of SRA is “to be a modernized, credible and customer centric Revenue Authority.”
SRA’s mission is “to provide an efficient and effective revenue and customs administration,
driven by professional and motivated staff, that promotes compliance through fair, transparent
and equitable application of the law.”
Organizational Values
Courtesy
We will treat all taxpayers and members of the public who we have dealings with, as well as our
colleagues, with courtesy and respect being sensitive to their rights, expectations and
responsibilities.

7. Equity and Fairness
We will apply the provisions of the Tax and Customs laws in an even handed manner, free of
personal, political, religious or other prejudices, and work to produce a level playing field for
commercial competition.
Honesty and Integrity
The management and all staff of the Authority will act and take decisions in good faith, and in
the best interests of the Authority and its stakeholders at all times. Staff will be expected to
adhere to the SRA Code of Ethics and Conduct and exhibit high standards.
Transparency and Accountability
The SRA will ensure the full disclosure of information as required by law, and, whilst respecting
the confidentiality of taxpayer information, explain clearly the reasons for decisions and actions
taken. We will ensure that appropriate mechanisms exist to provide accountability for the
decisions and actions of staff and managers.
Value for Money
We will use the resources at our disposal wisely, avoiding waste and extravagance.
Professionalism
We will invest in staff and encourage them to achieve their potential. In return we expect that
they will perform their duties with skill, care and diligence and provide taxpayers and the public
with advice and service in a consistent and professional manner.
Team Spirit
We will work as a team and support each other and build mutual trust and confidence to achieve
the Authority’s goals.
Social Responsibility
The Authority will strive to be a model of ethical business behavior and will respect the legal
rights of all taxpayers and uphold the obligations on us contained in the Taxpayer Charter.

8. 1.2 Background to the study
Originally customs and the post office was administered by government, so customs officers
who were stationed at the post office back then were under the same management with the post
office staff , the only difference was the departmental segregation of duties. Guided by the 1971
Customs Act and 1983 Sales Tax Act, the Commissioner of Customs made an arrangement that
Managing Director of Swaziland Post and Telecommunications is to collect tax payable on
behalf of the Commissioner under this Act in respect of taxable value of any goods imported into
or transferred to Swaziland by post (Amended A 9/1991).
However in 1988 Swaziland Post & Telecommunications became a government parastatal by
statute, separating from Customs which never changed anything in the duties, what the post
office has been doing remained with them and the same with customs as they were both
administered by government but under different managements. Information gathered is that they
would liaise with each other but there would have some misunderstandings somehow where
their duties would clash as procedures had changed. Making an example of inspections, customs
officers have the authority to open any suspicious parcels and detain it if need be as their duty is
also to control the smuggling of prohibited and restricted goods, as well as revenue collection.
At the time of the separation, customs officers were in control of overseas (big) parcels only and
the post office controlling ordinary and insured parcels, as it is the case even today. Except for
the revenue collection both parties could do, considering the controlling of smuggling of
prohibited and restricted goods and detaining, only customs officers could do that as trained and
authorized personnel. Here one can tell how impossible it was working as a team as there would
be confrontation every day. As it is now it is like Customs officers are there as a backup in doing
other post office duties.
Customs officers used to be in all office post offices in the country, as time went by the services
were left redundant in the other regional post offices to the Manzini regional post office as it was
the busiest trade zone and the central part of Swaziland with the advantage of the airport nearby.
Information gathered during the research is that the Manzini post office is in the process of being
the central sorting point. Swaziland being a member of the World Customs Organization he also
joined alliances with established member states in the SADC Region. Guided by the Customs
Act of 1971, it was then seen that no action can be an offense unless there is a provision in the
Act which says so. That way provision of the Act was applied. Standard operating Procedures
were set for offenders contravening this Act together with penalty guidelines which were
categorized.

9. 1.3 Justificationof the study
Customs operates in a complex market where risk is real and unavoidable. The research
therefore revealed and quantified such risk factors which will benefit the organization in
preparing for such risks. The research also aimed at revealing and recommending improvements
in the operations with the selected major stakeholder, Swazi Post.
1.4 Purpose and Objectives of the study
The purpose of this study was to deeply analyze the operations of customs department and
identify areas of strength and weaknesses and see how they can be improved without creating
antagonism with other stakeholders. The study focused on Swazi Post as a major stakeholder of
the SRA’s customs department.
The specific objectives of the study included the following:
 To study the existing framework of operations between Swaziland Revenue Authority’s
Customs Department and Swazi Post.
 To identify the existing operational procedures, if any, between the Customs Department
and its stakeholders, with specific reference to Swazi Post.
 To identify the existing challenges to the smooth operations of the Customs Department
regarding revenue assessment and collection at Swazi Post.
 To recommend solutions to the identified challenges in order to improve Customs
Department operations.

10. 2.0 Situation Analysis
2.1 The Customs Department of Swaziland Revenue Authority (SRA)
Customs in Swaziland is administered by the SRA Customs and Excise Department in
accordance with the Customs and Excise Act of 1971.
The Customs Department performs key functions for the country's development including:
 To collect the revenues due to government through enforcement of controls to protect
society.
 Prohibitions, restrictions and regulatory (for example, narcotics, unlicensed medicines,
arms and ammunitions, pornography etc.)
 To identify and interdict illegitimate trade (for example counterfeit or substandard goods;
trade in endangered species - CITES obligations)
 Collection of trade statistics
 Trade facilitation
Goods imported into Swaziland from outside of the Southern African Customs Union (SACU)
are liable to Customs duty and for some classes of goods also Excise duty. Value Added Tax is
also payable on imports both from SACU and elsewhere.
2.1.1 SRA-Customs Organogram
Commissioner Customs
Director Tecnical
Origin,Tarrif,
Valuations,Legislations
Director Central
Operations
Compliance
Enforcement
Director Field
Operations
Ports of Entry
Director Operations
Policy
Policy Procedures
ASYCUDA
Director Projects
World Customs
Organisation
SACU

11. 2.1.2 Operating Hours at borders in Swaziland
Border Posts/Customs
Office
DailyOperating
Hours
Ngwenya 0700hrs to 0000hrs
Lavumisa 0700hrs to 2200hrs
Mahamba 0700hrs to 2200hrs
Matsamo 0700hrs to 2000hrs
Mananga 0700hrs to 1800hrs
Sandlane 0800hrs to 1800hrs
Mhlumeni 24hrs
Lomahasha 0700hrs to 2000hrs
Sicunusa 0800hrs to 1800hrs
Nsalitje 0800hrs to 1800hrs
Bulembu 0800hrs to 1600hrs
Lundzi 0800hrs to 1600hrs
Gege 0800hrs to 1600hrs
Inland stations (except Saturdays, Sundays
and Public Holidays
Matsapha ICD 0800hrs to 1700hrs
Matsapha AGOA Office 0800hrs to 1700hrs
Mbabane Clearance Office 0800hrs to 1700hrs
Matsapha Airport 0800hrs to 1700hrs
2.2 The Swazi Domestic Economy
The effects of the global economic crisis, slow growth in the major trading partners including
South Africa and the decline in SACU receipts which led to fiscal challenges have slowed the
recovery of the domestic economy. Global demand for domestic products has fallen as a result of
the global crisis compared to the year 2010.

12. Swaziland’s Receipts from SACU by year
2005/06: E3, 137, 358, 000.00
2006/07: E5, 321, 825, 000.00
2007/08: E4, 987,517, 000.00
2008/09: E6, 009, 000, 000.00
2009/10: E 5,200,000,000.00
2011/12: E7, 100, 000, 000.00
Figure 1: Graphical representation of SACU Receipts
0
1000000000
2000000000
3000000000
4000000000
5000000000
6000000000
7000000000
8000000000
SACU Receipts in Emalangeni
SACU Receipts in Emalangeni

13. Figure 2: SACU receipts in pie chart
2.3 Inland Customs Stations
(a) Nhlangano and Matsapha AGOA: Inspection of imported materials and
exported apparels and endorsements of certificates of origin.
(b) Motor Vehicle Valuation Unit (MVVU): Processing motor vehicle Evaluations.
(c) Big Bend and Simunye Distillers: These customs offices are stationed in the
sugar belts of the country for the purposes of ethanol production which is under
excise department.
(d) Matsapha Airport: Inspection of luggage and other imported goods.
(e) Mbabane Clearing Office: Clearing of imported cars after Interpol assessment
and reconciliations.
(f) State warehouse – This is where the detained and seized goods are kept until
customs clearance or forfeiture. The duration of detained goods is three months
after that they are permanently forfeited by the state and only the Commissioner
can seize in terms of Section 88(c) of the customs Act.
(g) Postal Services– The post office is supervised under the Matsapha Inland
Container Depot (ICD) and mainly used by once off importers. Due to unclear
reasons, customs assess only “big” parcels coming from overseas, however in the
researcher’s findings it was discovered it is supposed to be all in in-coming
10%
17%
16%
19%
16%
22%
SACU Receipts in Emalangeni
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2011-2012

14. parcels. When revenue administration was handed over from government to
Swaziland Revenue Authority in 2011 there were no procedures formed to guide
the Customs-postal operations, leading the postal area with visible irregularities
which is the main focus of the research study.
2.4 Customs Services at Swazi Post
With the present staff compliment, Customs does not have a fulltime officer stationed at the post
office, what is normally done is, the station arranged to attend post office parcels on selected
days and that’s when customer queries are also addressed. Manzini post office is about 8kms
from Matsapha Inland Container Depot, where the researcher is officially stationed. This
becomes an inconvenience to both the clients and officers, whereby the post office call our office
and request to be attended same time. Due to this, attending the post office is more of rescuing
the situation than a normal service centre because some other work is left unattended to.
Attempts to raise that concern were made and so far nothing has been done about it, of which
this study report will also come as a wakeup call to the employer as far as staff shortage is
concerned. In April 2012 reshuffles were affected within customs department, out of 11 officers
6 were transferred to various border posts and only 5 were left at ICD. In the process new
procedures (selectivity mode) were introduced where each officer is assigned documents by the
risk engine and in the absentia of that officer, no other officer can assess it if attempts to reroute
it are futile.
So this is a clear indication that the post office was left out in the planning yet there are services
there which need customs attention. It is the reason customs services at the post office face
challenges because there is no officer that was officially stationed there.
2.4.1 Overseas parcels
The Post office distinguish overseas parcels by physical appearance for customs declaration
which is “small and big packages” instead of their value. The researchers’ main concern here is
the issue of parcels which are considered “small packages” but of high value. This includes gifts
which were exempted in the Sales Tax era which are charging in the current VAT. The post
offices explanation to separating them from those forwarded to customs was that they have a
sticker written CN22. However the research revealed other parcels without CN22 which were
not declared to customs. This sticker is pasted by the sender declaring the item as a ‘small
package”. The researcher had an opportunity to see these types of parcels and following are the
pictures taken as evidence.

15. Figure shows the CN22 tag and a taxable value of $100
Figure shows the CN22 tag but the value and the specific item is not given. (to be queried)
Figure shows valuable undeclared items found in the CN22 parcels which are so called “small packages”

16. Figure shows a customs declaration form without a CN22 tag with a taxable value of $320
All the above parcels are considered “small packages” but shockingly they are released without
paying any duties and taxes yet their values are taxable. Quoting second schedule of section 8 on
exemption of imported goods 1983 Sales Tax Act, part 1.06 says “goods imported by post of
taxable value not exceeding E100 per parcel”. This irregularity shows that there is a clash
between the then procedures and the Act and has to be revisited by Swaziland Revenue
Authority considering the effects brought by the introduction of VAT in April 2012, where
everything including gifts has to be taxed unless it is below the allowed limit or exempted.
Currently these type of parcels are not under customs’ authorised to conduct inspections. So all
parcels with the above issues are released without paying duties and taxes and this was
confirmed during the study. In the researchers’ time working at the post offices, no customs
officer was called to attend a query in ordinary or “small parcel as they are not under customs
supervision. Beside the interest in revenue collection, this is a loophole in customs conducting
controls on this type of goods.
Quoting from an incident where a client imported two parcels from overseas where one parcel
was falsely declared, the other one was not declared to customs, reason being a claim it has a
CN22 label categorizing it to a "small package". Accidentally this parcel slipped to customs
hands because the other parcel it came with had a query of false declaration when the client
came to collect it. The so called "small package" was a Nokia E6 with a value of $320.00 (see
above picture) and in the interest of revenue collection one may wonder how much revenue
Swaziland Revenue Authority is losing through these unclear parcel movements.
2.4.2 Parcels coming South Africa
Coming from South Africa we have ordinary, insured parcels and Cash on Deliveries. Risk
identified during the study is the front door smuggling of these goods which also affect the

17. “small packages” from overseas parcels. Due to the arrangements made between the two parties
in the Sales Tax regime, our office cannot be in full control of regionally prohibited and
restricted imports as per the customs duties as some of the parcels are not in our supervision, like
the one show below.
Figure above shows a customs declaration of an ordinary parcel without value and description.
The parcel was opened and items found to be of a value of E6000.00. (equi: £400@£1.00 equals
to E15.00.
This is a consignment of perfume products from a South African – Cape Town based
manufacturing company. Information gathered from a reliable source confirmed that some of
these parcels’ declarations do mention that invoices are inside the parcel for customs declaration
but without the authority to open it, they release it instead of calling a customs officer, even then
that is done in the presence of the owner for security reasons. However after a week having
started the investigations the sticker mentioning customs invoice inside was removed in all this
parcels, which is an indication that someone inside the post office leaked the information about
the on-going investigations. The researchers’ investigations concerning this parcels proved that
the supplier- INUKA exported 248 boxes of perfume products in 2012 only, starting from
February to December to different distributors in Swaziland. Due to high confidentiality in this
matter there wasn’t enough time to take also the tracking numbers for each box. The researcher
tried to get a rough estimate value of all the boxes imported in 2012 using an invoice from the
supplier, which showed a possibility of a value close to E1.5 million as each box value ranges
between E5000.00-E6000.00. With the help of the importer it was discovered that the sizes of
the boxes used to be bigger than they are now as the network of the market was large in 2012
due to high market demand. The researcher’s concern is that these perfumes are commercial
products which are still in high demand in the market looking from the analysis of the flow.

18. 3.0 ResearchMethodology
The basis of the study was to deeply analyze the operations of customs department and identify
areas of strengths and weaknesses and see how they can be improved. In order to collect
sufficient and reliable data, the following qualitative and quantitative methods were used in data
collection and analysis.
3.1 Data Collection
The researcher employed both quantitative and qualitative techniques to collect and analyze all
relevant data.
 Semi-structured and structured interviews were adopted to collect data from the
management staff of both the Swaziland Revenue Authority and Swazi Post.
 In depth interviews were particularly held with the management of the post office and the
key people to the report, such as the post office staff, and the selected tax payers.
 Field observations were used to collect data on classification, labeling and valuation of
overseas parcels and packages.
3.2 Sources of data
The study focused on key relevant respondents to collect the necessary and reliable data to
answer all research questions and satisfy its objectives. The study collected data from many
sources that included the following:
 Management staff of the Customs Department of the Swaziland Revenue Authority who
provided information on past and current operational procedures.
 Senior management and supervisors of Swazi Post who informed the study on parcel
handling systems and collaborative arrangements with the customs department.
 Customs Department field staff for data regarding the labeling and valuation systems
employed for tax grading purposes.
 All categories of respondents also provided information on the challenges faced in
executing their duties and specifically, the collaborative operational arrangements
between the two organizations.

19. 3.3 Data Analysis
Considering that this particular study focused on the operations of customs department, existing
strength and weaknesses, and recommending improvements, simple quantitative and qualitative
techniques were employed to analyze the data.
The findings of the study were therefore presented and analyzed both qualitatively and
quantitatively in response to the research objectives/questions.
4.0 ResearchFindings and Discussions
The research findings were presented on the basis of the study objectives and analyzed in light of
its intended purpose. The findings and there discussions were categorized into the following
subsections.
4.1 Customs Operational Procedures
1. Poor Customs Controls Point
The Customs department, being stationed in Manzini region is unable to sufficiently monitor
queried parcels that are sent outside Manzini and also does not get feedback as to what happens
to them. Such parcels are dispatched without being charged with the hope that it will be taken
care of at its destination. This has become impossible since customs offices are no longer in all
post offices in the other regions of the kingdom as it used to be, where direct handovers can be
made. This shows that SRA is fully dependent on the post office for our revenue collections, yet
the entities do not share the same organizational objectives and mandate.
2. Movement of Parcels
Customs is second hand at receiving the parcels when the courier arrives and we find the post
office having sorted parcels to be attended by customs from those they call “ordinary or small
parcels”. According to the post office this parcels are believed not to be charging any duties or
taxes except for postal service charges only. Following is the diagram showing the movement of
parcels when they arrive at the post office.

20. Figure showing the current movement of parcels
In this movement, it is the post office that decides which parcels are to be handed over to
customs. SRA’s risk zone of losing revenue is stage 2 and 3 when the post office receives and
sorts the parcels. This is done by the post office staff in the absence of customs, yet according to
customs procedure the seal on the courier van has to be broken by a customs officer. This lack of
participation or monitoring by customs opens up chances of under declaration and smuggling
which in turn leads to loss of revenue.
3. SRA – Customs Conflicting Roles and Functions
Customs responsibilities include controlling the movement of prohibited and restricted goods
which is not practical in the present scenario. The arrangement made by the post offices’
Managing Director and Commissioner as the customs Act says, looking at the present
irregularities it indicates that they were a lot of things that had to be reviewed when SRA took
CUSTOMS
Facilitation
Compliance
Control

21. over, taking into consideration the changes that came with the introduction of VAT. Making an
example of all goods taxable including gifts yet some other parcels are still controlled by the
post office which is not given a full authority to undertake physical examinations the same way
as customs officers do. Thinking of the performance bonuses, how are officers going to be
appraised if some of their duties are partial. This is how smuggling has become an official thing
without the involved people knowing it is illegal because SRA set new procedures without
reviewing how government has been operating at the post office.
4. Searches and Physical Examinations
Section 14 of the Customs Act gives power to customs officers to open packages in the absence
of the owner but due to claims that parcels get lost at customs, it was then suggested that parcels
should be opened in the presence of the owner or a post office staff. We have had an incident
whereby a parcel was claimed to have been found empty by the owner at its destination and this
predicament should come as a wakeup call to customs department. Such rudimentary methods of
examination present loopholes for dishonesty and legal cases against SRA.
Former Advisor to Commissioner General, David Child quotes: “Curiosity is one of the requisite
virtues of a competent Customs Officer. For revenue management, curiosity drives competence.
So it is actually a complement to be seen as a curious officer in this business’
In the absence of laboratory facilities for testing illegal drugs and scanning devices, controls
cannot be ascertained and mostly because of the controls which are not jointly implemented with
the post office. The importer had to wait for hours for the results while police anti-drug unit was
called to do tests of the above substance. With the globalization and technology trends that affect
customs administration, there should be ways and concepts that underpin modern customs
administration practices.
The figure above shows a powdered substance which was suspected to be cocaine.

22. 4.2 Swazi Post Parcel Handling Systems
1. Manual Clearance of Postal Items.
The customs value of imported goods shall be the transaction value, i.e. the price actually paid or
payable for goods sold for export to Swaziland, as adjusted in accordance with the provisions of
section 67 of the Customs and Excise Act of 1971. Revenue collected at the post office is
customs duties and external tax.
The post office is spared from the customs procedures implemented in other entry points in the
country, it was discovered that some procedures are impossible to apply due to the present
working conditions. As mentioned before that some entry points are not remotely connected to
ASYCUDA because they are used by once off importers /exporters and the post office being one
of them. It was discovered that the post office has so many loopholes as documents there are
being processed manually.
2. Inadequate Staffing
So this is a clear indication that the post office was left out in the planning yet there are services
there which need customs attention. It is the reason customs services at the post office face
challenges because there is no officer that was officially stationed there.
The existing inadequacy in staffing presents challenges in tracking, assessing, valuation and
revenue collection as this would require more than the current staff compliment.
4.3 Collaborative Arrangements
1. Lack of MOU between Customs Department (SRA) and Swazi Post
Responses obtained from Swazi Post senior management during a tour by the SRA-Customs
Procedure Team showed less interest in cooperating with SRA - Customs to collect revenue than
seeing their clientele growing regardless of the threat of VAT introduction. This in a way may
imply that Swazi Post was contributing to non-compliance. When asked about detentions and
controls they admitted to having no idea as to what and when to detain, as the Act gives the Post
Master the authority to do that, except for prohibited goods which they report and take into
police custody.

23. 2. Lack of Reconciliations
The Swaziland Revenue Authority made an agreement with the post office that customs should
not collect the revenue from the clients instead the post office is requested to do that on behalf of
SRA. All we do is the paper work of FORM CE 490 forms which we return every month end.
Information gathered is the post office then submit a single cheque having added up all the
collections from all the post offices in Swaziland. When questioned how they make payments
when there are pending parcels, the response was documents for pending parcels which are not
charged are kept until they query is attended and the revenue collected is forwarded to the
following month cheque payment.
The main query of the researcher which was left unanswered is, as customs use FORM CE490
for data capturing on the overseas parcels, how are they reconciling the ordinary and insured
parcels before making the payment to SRA as those parcels are not controlled by customs. This
question can only be answered by accounts departments on both SRA and Post office. With the
help of the investigation team, the researcher tried to trace the exact figures the post office pay as
our monthly collections, which were found not be tallying. Making an example of December
2012, overseas collections which amounted to E30, 504.41 according to customs reports against
E10, 563.45 the post office claims to having collected in the month. This amount was inclusive
of duties which are not apportioned in the figure for SACU shares. As the country survives on
SACU shares, this indicates incompetency on SRA side.
The researcher discovered that only insured and cash on deliveries are taxed, as for the ordinary
and “small packages” they are released without paying. Customs cannot reconcile for those since
they are not in our control such that we do not even have statistics for them. However this
variance may be due to varying payment dates by the clients which is uncontrollable because it
is the researcher’s primary data that the reported figure does not include pending or queried
parcels The problem we are facing is that when we have queried parcels being dispatched
outside the region we release it to the destination where the query will be attended to by the
owner, with the hope that as the station having queried the parcel we will get feedback and
update our records, of which that doesn’t happen. This is an indication that the seriousness of
that query is not considered. There is one instance where a queried parcel was found released
having not paid the duties, so this is a great concern.

24. 4.4 Non-Compliance
Introduction of VAT from Sales Tax is one major effect that led to non-compliance. Importers
started looking for alternative ways to evade tax by smuggling goods. This is one reason it is
suggested that clients should make payments direct to SRA – customs not at post office. The
leakage is mostly on goods coming from South Africa, there is a possibility of leaking of
information leading clients taking advantage of that loophole which may originate from within.
The researcher had a brief interview with a department manager at the post office about the front
desk smuggling of goods, which he was not aware of and promised to double check with the
staff processing the parcels. He further stated that there is a lot that needs to be reviewed by the
two parties as they both render services to the same customers.
4.5 Health and Safety Issues
Working conditions at most depots are not favourable and pose imminent danger to the health
and safety of the employees. The rooms at the post office are small and lack air conditioning
making it difficult for staff to work comfortably for long hours. This is a health hazard as staffs
sometimes deal with some powdered and dangerous substances which can be harmful to health.
There are no health and safety control measures taken to make sure officers are in safe working
conditions.
5.0 Conclusions and Recommendations
5.1 The immediate effect of the study
In response to the commissioning of the study, the Customs Procedure Team led by the
Department Manager had a tour to the Manzini post office where the sorting of parcels takes
place. The main objective of the tour was to assess the feasibility of forming or drafting an MOU
between SRA –Customs and Swazi Post. As a first since the establishment of SRA, the MOU
would highlight, document and agree on operating procedures to meet the vision of SRA. The
researcher was part of the delegation and had a rare opportunity to ask questions direct from the
Swazi Post Manager and other senior management about their operations, but too relevant to the
study.
The talks were fruitful as both parties came to an agreement that all incoming parcels should go
through customs for scanning and assessments before forwarded to the post. It was also agreed
that the couriers should have a SRA seal from the point of entry until the central sorting point
where it will be broken by a full time customs officer permanently stationed there.

25. Lastly the SRA delegation was taken around to see custom’s new office, well ventilated and
spacious as compared to the previous one. We were also shown a scanner machine that will be
used to scan parcels before they are assessed. That shows an improvement in modernizing our
operating systems as it was one of the major concerns of the study. A concern of having more
than one officer was raised as the new changes come with a lot of responsibilities. It was also
highlighted that stakeholders should also be involved in the process of drafting the agreement.
All this activities took place in the presence of both parastatals’ legal officers who were jotting
down significant points to drafting the proposed MOU. At the time of submitting the study SRA
- Customs so far had drafted a proposal of a formal declaration form and the MOU.
5.2 Customs Controls Point
Suggestion made is that queried parcels have to remain at the point of entry until the query is
addressed by the recipient then it can be dispatched to its respective destination. However this
can only apply for effective revenue collection, which on the side of the importer leads to trade
frustration, especially when the recipient is in another region.
Alternatively, the old system of customs offices in all post offices should be reinstated as
handovers of the queries can be made direct to other customs officers not post office staff. That
way post office monthly revenue collection reports can be reconciled with the cheque payment
sent by the post office as our monthly collection. This way the thought of the post office staff
being accomplices in helping “their” clients to evade tax would a thing of the past.
5.3 SuggestedMovement of Parcels
In order to avoid under-declaring and possible collusion in the movement of parcels, it is
suggested that all parcels including overseas, regional, small and ordinary parcels go through
customs. This will enable the customs officers to charge all taxable parcels before passing them
on to the post office for dispatch. A suggested movement of parcels shown in the diagram below
would minimize loss revenue through under-declaration and smuggling.

26. Figure showing suggested parcel movement
Alternatively, a full-time customs officer(s) should be stationed at Swazi Post offices to witness
the arrival of the parcels and participate in the sorting of the parcels and then charging all those
that are taxable before they are dispatched. SRA-customs must be first hand at attending all
incoming parcels at the post office to make queries and hold the parcel until that query is
attended to, which the post office is unable to do as some parcels bypass customs and released
without paying duties and taxes.
For competence’s sake, there is need for clarification on how overseas parcels are determined
'small or big”, by value or by weight? This move will help in timely risk assessment where the
officer will witness the transparent movement of the parcels.
5.4 Modernization of Systems
The study found that most systems at both Swazi Post and Customs are either ancient or
inadequate to efficiently handle parcel handling and tax valuations. As a result the researcher
suggested the following recommendations to streamline and improve operations.
 The post office and other depots should be linked directly to the ASYCUDA network to
streamline revenue collection.
 Setting up of laboratory facilities for testing illegal drugs and substances in order to
minimize trade in prohibited substances.

27.  The post office and other key depots should be equipped with scanning devices and
facilities to ensure that items can be verified without necessarily opening up the parcels.
This will also minimize client complaints and improve trust in the customs department.
 Computers and the internet should be readily accessible to customs and post office staff
to enable them to capture up to date relevant data. Access to internet will provide updated
harmonized tariff codes and timely currency conversion rates to ensure that tax
valuations are accurate and up to date.
 There is vital need to improve data capture and communication technology in order to
improve the speed and handling of increasing volume of trade and parcel movement.
ASYCUDA and other forms of IT improvements will bring about the following benefits:
 Facilitate and improve the calculation, collection and accounting of Customs duties and
other charges related to Customs operations;
 Speed-up the clearance of goods and help prevent smuggling;
 Provide the Customs management with timely and accurate information.
5.5 Streamlining Reconciliations
Sufficient and timely reconciliations were found to be lacking hence affecting the smooth and
accurate operations of revenue collections. It is there recommended that that all parcels with
queries should not be released until the recipient addresses the same. All reconciliations should
also be submitted and completed every end of month to minimize any irregularities.
Alternatively full time Customs officers should be stationed in all post offices in Swaziland who
will in turn inspect, assess and collect all the duties and taxes. This will enhance the timely
submission of monthly returns to the customs department.
5.6 Improving Staff Compliment
Inadequate staffing in the customs department was identified as one of the major hindrances to
the smooth operations of revenue collection between Swazi Post and SRA-Customs department.
In order to track and assess all taxable parcels, and ensure minimal delays in monthly returns, it
is recommended that SRA-Customs hires additional field-based staff, some of whom would be
stationed at the post offices and other depots.

28. 5.7 Compliance Enhancement
During data collection, it was noted that there is a high level of non-compliance amongst
importers in form of non-declaration, smuggling and white collar crime. The reasons for this
non-compliance are not evidently clear but might lie in the universal fact that businesses
generally have a poor attitude towards taxation. In order to enhance compliance, the researcher
recommends the following measures:
 Swaziland Revenue Authority should plan and conduct massive education and awareness
campaigns to promote the awareness on the importance of taxation and its compliance.
Such campaigns should target both the business community and the relevant staff of SRA
and Swazi Post.
 All identified cases of non-compliance including smuggling, non-declaration, collusion
by staff should be swiftly forwarded to police for prosecution.
5.8 Health and Safety Management
Both Swaziland Revenue Authority and Swazi Post should provide sufficient, spacious, safe and
healthy working environments for their employees to ensure that they work comfortably to be
able to assess all parcels.
It is recommended that all staff members who are exposed to dangerous substances and
environments should be provided with adequate Personal Protective Equipment (PPE). All such
equipment should be regularly inspected and maintained to ensure maximum attainable
protection. Such equipment may include: face masks to avoid inhalation of dangerous
substances and eye contamination; and hand gloves to avoid skin contamination and corrosion.
5.9 Management by Objectives (MBO)
This is a process of defining objectives within an organization so that management and
employees agree to the objectives and understand what they need to do in the organization. The
essence of MBO is participative goal setting and the comparison of the employees’ actual
performance with the standards set. Ideally, when employees themselves have been involved in
goal setting and choosing the course of action to be followed by them, they are more likely to
fulfill their responsibilities hence, the organization’s objectives.
The researcher deems necessary and inevitable that SRA-Customs adopts the MBO approach to
enhance their organizational performance. This can however, only achieve results if other major
shortcomings such as staff needs and technological challenges are addressed.

29. List of References
James P. Lewis, Fundamentals of Project Management: Producing a Workable Schedule. Third
Edition, 1941.
Ministry of Finance, Swaziland Government, The Customs and Excise Act of 1971.
Ministry of Finance, Swaziland Government, The Revenue Authority Act of 2008
Ministry of Finance, Swaziland Government, Sales Tax Act of 1983.
Ministry of Finance, Swaziland Government, The Value Added Tax Act of 2010.
SRA, The Swaziland Revenue Authority Newsletter, of January 2013
SRA, Swaziland Revenue Authority website: www.sra.org

30. Appendix I:List of Pictures
Figure above shows an article from the SRA Newsletter describing the capture and confiscation
of smuggled cigarettes.
Figure showing a view of Matsapha Inland Container Depot. Inset: the researcher at work.

31. Figure the picture shows a consignment of milled clinker - a component for cement production
(Matsapha ICD).
Figure shows the front view of the Manzini Post office.

32. Figure shows the receiving and loading zone at Manzini Post Office.
Figure shows the Swazi Post Manager addressing Customs Procedure team during a tour of
Customs new office at the Post office.