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AN ASSESSMENT OF THE EFFECTIVENESS OF AUTOMATION
AS AN INFORMATION TECHNOLOGY INTERVENTION IN
CURBING CUSTOMS ADMINISTRATIVE CHALLENGES: A CASE
OF ZIMRA
BY
NOKUTHULA TANIA MPUMELA (RO47150G)
A dissertation submitted in partial fulfilment of t he requirements
for the degree of Master of Business Administration
2015
Graduate School of Management
University of Zimbabwe
SUPERVISOR: DR G. HAPANYENGWI
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DEDICATION
I dedicate this dissertation to my loving family and my Lord and Saviour who has brought me this far.
iii
DECLARATION
I, Nokuthula Tania Mpumela, do hereby declare that this dissertation is the result of my
own investigation and research, except to the extent indicated in the acknowledgements,
references and by comments included in the body of the report, and that it has not been
submitted in part or in full for any other degree to any other university.
________________________ ___________
Student signature Date
________________________ ___________
Supervisors signature Date
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ACKNOWLEDGEMENT S
I would like to express my sincere gratitude to the Almighty God for his abundant grace
and favour which has brought me this far. I would also like to thank my loving family,
my husband, mum, dad, siblings and my precious children for the love and support that
they gave me throughout my studies. I couldn’t have done this without you all, you are
the best.
I would also like to thank my supervisor Dr Hapanyengwi, Mr Magaramombe and Dr
Madzikanda for their invaluable contributions and assistance.
I further extend my gratitude to everyone who assisted me and encouraged me during my
studies.
v
ABSTRACT
The dissertation sought to assess the effectiveness of automation in curbing customs
administrative challenges in the Zimbabwe Revenue Authority (ZIMRA). The research
objectives were to identify the customs administrative challenges faced by ZIMRA,
identify areas where automation has succeeded as an IT intervention in curbing customs
administrative challenges in ZIMRA, ascertain areas where automation has failed as an IT
intervention in curbing customs administrative challenges in ZIMRA and to find out
whatchallenges impede the effectiveness of automated systems. The scope of the study
was to focus on ASYCUDA which is the automated systems that is used by ZIMRA in
customs administration. Literature review was carried out on the topic under study which
revealed the strides that ASYCUDA has made in curbing customs administrative
challenges. There was however a gap in the literature on the limitations of ASYCUDA as
an automated system.
A qualitative research was undertaken and a case study of the Zimbabwe Revenue
Authority was used. Primary data was obtained using interviews and secondary data in
the form of reports, customs journals, periodicals and publications was used. A total of
seventeen respondents were interviewed, ten being managers from the Customs division
whilst the other seven comprised of clearing agents. The respondents were selected using
purposive sampling. The respondents from ZIMRA were selected based on their work
experience, expertise and knowledge in the area under study whilst clearing agents were
selected based on the size of their companies with regard to their clientele base. Data
were analysed through data reduction, coding, categorization and identification of
common themes.
The study revealed that ZIMRA faced ten challenges and that ASYCUDA has been
effective in curbing eight of these challenges. It was therefore concluded that
ASYCUDA has been effective in curbing customs administrative challenges in ZIMRA.
The study also identified challenges that impede the effectiveness of ASYCUDA in
curbing customs administrative challenges. Recommendations were therefore made in
line with these findings as to how these challenges can be addressed in order to
effectively utilise ASYCUDA.
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Table of Contents
DEDICATION ................................................................................................................................. ii
DECLARATION .............................................................................................................................. iii
ACKNOWLEDGEMENTS ............................................................................................................... iv
ABSTRACT ..................................................................................................................................... v
LIST OF TABLES ............................................................................................................................ xi
LIST OF FIGURES ........................................................................................................................ xiii
LIST OF ACRONYMS AND ABBREVIATIONS .................................................................................xiv
CHAPTER 1 ........................................................................................................................................ 1
INTRODUCTION ................................................................................................................................ 1
1.0 INTRODUCTION ................................................................................................................ 1
1.1 BACKGROUND OF THE STUDY .......................................................................................... 1
1.2 ZIMRA’S BUSINESS MODEL ............................................................................................... 2
1.2.1 CUSTOMERS ............................................................................................................. 3
1.2.2 PROFIT FORMULA .................................................................................................... 3
1.2.3 KEY RESOURCES ....................................................................................................... 3
1.2.4 KEY PROCESSES ........................................................................................................ 4
1.3 MACRO ENVIRONMENTAL ANALYSIS ............................................................................... 4
1.4 PESTEL FRAMEWORK ........................................................................................................ 5
1.4.1 POLITICAL ENVIRONMENT ....................................................................................... 5
1.4.2 ECONOMIC ENVIRONMENT ..................................................................................... 6
1.4.3 SOCIAL – CULTURAL ENVIRONMENT ....................................................................... 8
1.4.4 TECHNOLOGICAL ENVIRONMENT ........................................................................... 8
1.4.5 LEGAL ENVIRONMENT ............................................................................................. 9
1.5 SWOT ANALYSIS FOR ZIMRA ............................................................................................ 9
1.5.1 STRENGTHS ............................................................................................................ 10
1.5.2 WEAKNESSES .......................................................................................................... 11
1.5.3 OPPORTUNITIES ..................................................................................................... 11
1.5.4 THREATS ................................................................................................................. 11
1.6 STATEMENT OF THE PROBLEM....................................................................................... 12
1.7 OVERALL OBJECTIVE ....................................................................................................... 12
1.8 MAIN RESEARCH QUESTION ........................................................................................... 13
1.9 RESEARCH SUB QUESTIONS ............................................................................................ 13
1.10 RESEARCH PROPOSITION/MAIN ARGUMENT ................................................................ 13
vii
1.11 JUSTIFICATION OF THE STUDY ........................................................................................ 13
1.12 SCOPE OF THE RESEARCH ............................................................................................... 14
1.13 DISSERTATION OUTLINE ................................................................................................. 14
1.14 CHAPTER SUMMARY ...................................................................................................... 15
CHAPTER 2 ...................................................................................................................................... 16
LITERATURE REVIEW ...................................................................................................................... 16
2.0 INTRODUCTION .............................................................................................................. 16
2.1 REVENUE ADMINISTRATION........................................................................................... 16
2.2 CUSTOMS MODEL ........................................................................................................... 17
2.3 CHALLENGES THAT ARE FACED IN CUSTOMS ADMINISTRATION ................................... 17
2.4 AUTOMATION OF CUSTOMS ADMINISTRATION ............................................................ 20
2.5 BENEFITS OF CUSTOMS AUTOMATION .......................................................................... 22
2.6 OFF THE SHELF IT SYSTEMS VS IN-HOUSE DEVELOPMENT OF AUTOMATED SYSTEMS
(NATIONAL SYSTEMS) ................................................................................................................. 22
2.7 CORE FUNCTIONALITIES OF CUSTOMS ICT SYSTEMS ..................................................... 23
2.8 TYPES OF SYSTEMS USED IN CUSTOMS ADMINISTRATION ............................................ 24
2.8.1 TATIS ....................................................................................................................... 25
2.8.2 TIMS ........................................................................................................................ 26
2.8.3 SOFIX ...................................................................................................................... 26
2.8.4 UAIS ........................................................................................................................ 27
2.8.5 CCIS ......................................................................................................................... 27
2.8.6 ASYCUDA ................................................................................................................ 28
2.9 HOW ASYCUDA HAS HELPED TO CURB CUSTOMS ADMINISTRATIVE CHALLENGES ...... 29
2.9.1 SIMPLIFIED/ STREAMLINED CUSTOMS PROCEDURES .......................................... 29
2.9.2 INCREASED SPEED OF GOOD’S CLEARANCE .......................................................... 30
2.9.2 REDUCED COSTS. .................................................................................................... 31
2.9.3 INCREASED REVENUE ............................................................................................. 31
2.9.4 IMPROVED REVENUE STATICS ............................................................................... 32
2.9.5 UNIFORM APPLICATION OF LAW .......................................................................... 32
2.9.6 REDUCED CORRUPTION ......................................................................................... 32
2.9.7 RISK MANAGEMENT .............................................................................................. 33
2.10 FACTORS WHICH IMPEDE THE EFFECTIVENESS OF ASYCUDA ........................................ 34
2.10.1 CONNECTIVITY CHALLENGES ................................................................................. 35
2.10.2 SYSTEMS CHALLENGES ........................................................................................... 35
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2.10.3 POWER OUTAGES .................................................................................................. 36
2.10.4 INADEQUATE INFRASTRUCTURE ........................................................................... 36
2.10.5 Challenges with Clearing Agents ........................................................................... 37
2.10.6 LACK OF SKILLS ....................................................................................................... 37
2.11 COMPARATIVE ANALYSIS ............................................................................................... 38
2.11.1 AFGHANISTAN ........................................................................................................ 38
2.11.2 NEPAL ..................................................................................................................... 39
2.11.3 NIGERIA .................................................................................................................. 39
2.11.4 IRAN ........................................................................................................................ 40
2.11.5 SAINT LUCIA ........................................................................................................... 40
2.10.1 PHILIPPINES BUREAU OF CUSTOMS ...................................................................... 42
2.12 CONCEPTUAL FRAMEWORK ........................................................................................... 43
2.13 LITERATURE SYNTHESIS .................................................................................................. 44
2.14 CHAPTER SUMMARY ...................................................................................................... 45
CHAPTER 3 ...................................................................................................................................... 47
RESEARCH METHODOLOGY ............................................................................................................ 47
3.0 INTRODUCTION .............................................................................................................. 47
3.1 RECAP OF RESEARCH QUESTIONS .................................................................................. 47
3.2 RESEARCH PHILOSOPHIES .............................................................................................. 48
3.3 RESEARCH DESIGN .......................................................................................................... 49
3.4 RESEARCH STRATEGY ..................................................................................................... 50
3.5 POPULATION AND SAMPLING TECHNIQUES .................................................................. 50
3.5.1 POPULATION .......................................................................................................... 50
3.5.2 SAMPLING TECHNIQUES ........................................................................................ 51
3.6 RESEARCH INSTRUMENTS .............................................................................................. 51
3.7 SOURCES OF DATA .......................................................................................................... 52
3.7.1 PRIMARY DATA COLLECTION METHODS ............................................................... 52
3.7.2 INTERVIEWS ........................................................................................................... 52
3.7.3 SECONDARY DATA ................................................................................................. 53
3.8 PILOT STUDY ................................................................................................................... 54
3.9 DATA ANALYSIS ............................................................................................................... 54
3.10 RELIABILITY AND VALIDITY ............................................................................................. 55
3.11 ETHICAL CONSIDERATIONS............................................................................................. 55
3.12 RESEARCH LIMITATIONS ................................................................................................. 56
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3.13 CHAPTER SUMMARY ...................................................................................................... 57
CHAPTER FOUR ............................................................................................................................... 59
DATA PRESENTATION, ANALYSIS AND INTERPRETATION .............................................................. 59
4.0 INTRODUCTION .............................................................................................................. 59
4.1 KEY RESPONDENTS ......................................................................................................... 59
4.2 ZIMRA EMPLOYEES: FINDINGS FROM STUDIES OBJECTIVES .......................................... 59
4.2.1 DEMOGRAPHICS .................................................................................................... 59
4.2.2 IDENTIFICATION OF CUSTOMS ADMINISTRATIVE CHALLENGES .......................... 60
4.2.3 ASYCUDA FUNCTIONS/MODULES USED BY ZIMRA .............................................. 64
4.2.4 AREAS WERE ASYCUDA HAS HELPED TO CURB CUSTOMS ADMINISTRATIVE
CHALLENGES ........................................................................................................................... 64
4.2.5 AREAS WERE ASYCUDA HAS FAILED TO CURB CUSTOMS ADMINISTRATIVE
CHALLENGES ........................................................................................................................... 66
4.2.6 HOW ASYCUDA HAS HELPED EMPLOYEES TO DISCHARGE THEIR DUTIES MORE
EFFECTIVELY ........................................................................................................................... 68
4.2.7 HOW ASYCUDA HAS HELPED TO PROVIDE MORE EFFICIENT SERVICES TO
CLIENTS. 70
4.2.8 CAUSES OF CHALLENGES FACED USING ASYCUDA ............................................... 71
4.2.9 HOW ASYCUDA HAS BENEFITED CLIENTS ............................................................. 73
4.2.10 FACTORS WHICH HAVE HINDERED ZIMRA FROM REALISING THE FULL BENEFITS
OF ASYCUDA........................................................................................................................... 75
4.2.11 STRATEGIES THAT CAN BE PUT IN PLACE TO EFFECTIVELY UTILIZE ASYCUDA IN
CURBING CUSTOMS ADMINISTRATIVE CHALLENGES. .......................................................... 76
4.3 CLEARING AGENTS: FINDINGS FROM STUDIES OBJECTIVES .......................................... 77
4.3.1 DEMOGRAPHICS OF CLEARING AGENTS ............................................................... 77
4.3.2 RATING OF SERVICE DELIVERY BY ZIMRA OFFICIALS USING ASYCUDA ............... 77
4.3.3 AVERAGE TIME TAKEN TO LODGE BILLS OF ENTRIES IN ASYCUDA ...................... 78
4.3.4 AVERAGE TIME TAKEN TO RECEIVE FEEDBACK FROM ZIMRA ............................. 78
4.3.5 AVERAGE TIME TAKEN TO CLEAR GOODS USING ASYCUDA ................................ 79
4.3.6 HOW THE USE ASYCUDA HAS BENEFITED CLIENTS. .............................................. 80
4.3.7 CAUSES OF CHALLENGES FACED USING ASYCUDA ............................................... 82
4.3.8 STRATEGIES ZIMRA SHOULD ADOPT TO EFFECTIVELY UTILISE ASYCUDA. .......... 84
4.4 REVISED CONCEPTUAL FRAMEWORK............................................................................. 85
4.5 RELIABILITY AND VALIDITY OF FINDINGS ....................................................................... 86
4.6 CHAPTER SUMMARY ...................................................................................................... 86
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CHAPTER 5 ...................................................................................................................................... 87
CONCLUSIONS AND RECOMMENDATIONS .................................................................................... 87
5.0 INTRODUCTION .............................................................................................................. 87
5.1 CONCLUSION .................................................................................................................. 87
5.1.1 CUSTOMS ADMINISTRATIVE CHALLENGES FACED BY ZIMRA. ............................. 87
5.1.2 AREAS WERE AUTOMATION HAS SUCCEEDED AS AN IT AN IT INTERVENTION IN
CURBING CUSTOMS ADMINISTRATIVE CHALLENGES IN ZIMRA. ......................................... 87
5.1.3 AREAS WERE AUTOMATION HAS FAILED AS AN IT AN IT INTERVENTION IN
CURBING CUSTOMS ADMINISTRATIVE CHALLENGES IN ZIMRA. ......................................... 88
5.1.4 CHALLENGES THAT IMPEDE THE EFFECTIVENESS OF AUTOMATED SYSTEMS. .... 88
5.2 TESTING THE RESEARCH PROPOSITION .......................................................................... 88
5.3 CONCEPTUAL FRAMEWORK ........................................................................................... 89
5.4 CONTRIBUTION TO THE BODY OF KNOWLEDGE ............................................................ 89
5.5 RECOMMENDATIONS ..................................................................................................... 89
5.6 AREAS OF FURTHER STUDY ............................................................................................ 91
REFERENCES ............................................................................................................................... 93
APPENDICES ................................................................................................................................ 99
xi
LIST OF TABLES
Page
1. Table 2.1 Status of systems and suppliers. 25
2. Table 2.2: Processes at Philippines Bureau of Customs before
and after implementation of ASYCUDA. 42
3. Table 3.1 Research Instruments and distribution methods. 52
4. Table 4.1 Demographics of ZIMRA employees. 101
5. Table 4.2 Identification of customs administrative challenges. 102
6. Table 4.3 ASYCUDA functions/modules used by ZIMRA. 103
7. Table 4.4 Areas were ASYCUDA has helped to curb customs
administrative challenges. 104
8. Table 4.5 Areas were ASYCUDA has failed to curb customs
administrative challenges. 105
9. Table 4.6 How ASYCUDA has helped employees to discharge
their duties more effectively. 106
10. Table 4.7 How ASYCUDA has helped to provide more
efficient services to clients. 107
11. Table 4.8 Causes of challenges faced using ASYCUDA. 108
12. Table 4.9 How ASYCUDA has benefited clients. 109
13. Table 4.10 Factors which have hindered ZIMRA from realising
the full benefits of ASYCUDA. 110
14. Table 4.11 Strategies that can be put in place to effectively utilize
ASYCUDA in curbing customs administrative challenges. 111
15. Table 4.12 Demographics of clearing agents. 112
16. Table 4.13 Rating of service delivery by ZIMRA officials
using ASYCUDA. 113
17. Table 4.14 Average time taken to lodge bills of entries in ASYCUDA. 114
18. Table 4.15 Average time taken to receive feedback from ZIMRA. 115
19. Table 4.16 Average time taken to clear goods using ASYCUDA. 116
20. Table 4.17 How the use ASYCUDA has benefited clients. 117
21. Table 4.18 Causes of challenges faced using ASYCUDA. 118
xii
22. Table 4.19 Strategies ZIMRA should adopt to effectively utilise
ASYCUDA. 119
xiii
LIST OF FIGURES
Page
1. Figure 2.1 Conceptual framework. 43
2. Figure 2.1 Conceptual framework 85
xiv
LIST OF ACRONYMS AND ABBREVIATIONS
ASYCUDA Automated System of Customs Data
CCIS Computer- Aided Information Systems
ICT Information and Communication Technology
IMF International Monetary Fund
IT Information technology
OECD Organisation for Economic Co-operation and Development
RKC Revised Kyoto Convention
TIMS Trade Information Management System
UAIS Unified Automated Information System
UNCTAD United Nations Conference on Trade and Development
WCO World Customs Organisation
WTO World Trade Organisation
ZIMRA Zimbabwe Revenue Authority
1
CHAPTER 1
INTRODUCTION
1.0 INTRODUCTION
This chapter is an introduction to the study which seeks to assess the effectiveness of
automation as an information technology (IT) intervention in curbing customs
administrative challenges in the Zimbabwe Revenue Authority (hereinafter referred to
as ZIMRA). The chapter provides the background to the study, research objectives of
the study, research questions, research proposition, justification of the study and the
scope of the research.The chapter also gives an outline of the structure of the
dissertation.
1.1 BACKGROUND OF THE STUDY
ZIMRA is an autonomous body which was created by an Act of Parliament in 2001
under Statutory Instrument No 21B of 2001.ZIMRA started operating on 19 January
2001 and derives its mandate from the Revenue Authority Act (Chapter 23.11) and
other subsidiary legislation and is responsible for assessing, collecting and accounting
for revenue on the behalf of the State. Its mandate is to:
(i) Collect revenue
(ii) Facilitate trade and travel
(iii) Advise Government on fiscal and economic matters
(iv) Protect civil society
Prior to the inception of ZIMRA revenue administration fell under the Department
of Customs and Excise and the Department of Taxes which faced numerous
challenges in their own right. The establishment of ZIMRA in 2001 was in line
with global best practices of establishing autonomous revenue authorities as an
alternative delivery model for improved revenue administration(Taliercio 2002
2
and Moore 2013). Revenue authorities have been seen as a solution to various
challenges such as ineffective tax administration, low rates of tax,poor
compliance, andcorruption (Maureen Kidd and William Crandal 2006). Revenue
authorities are unique and complex organisations (Deve 2014), which face
peculiar challenges than those faced by normal business entities and have a great
stake to play in a country’s macro-economic environment (Richard Bird and
Milka Casanegra de Jantscher, 1992) and in Zimbabwe’s case, ZIMRA can be
construed as the backbone of the country as it is the government’s primary
revenue collection agent.
The importance of revenue collection in a country cannot be overemphasized
neither can the importance of having an effective and efficient tax administration
system. According to Bird (2010) tax administration is an audacious task even in
the best of times and in the best of places. A number of measures have been put
in place by revenue authorities in order to curb some of the administrative
challenges they face and one such strategy lies in adopting information technology
(IT) in order to alleviate some of the challenges that are being faced. ZIMRA has
therefore adopted this strategy and has made considerable investments in IT in a
bid to increase operational efficiency, increase revenue flows, curb corruption and
smuggling whilst at the same time providing convenience to its clients in line with
its moto “We are here to serve”. The purpose of the study is therefore to assess the
effectiveness of automation as an IT intervention that has been put in place in
curbing customs administrative challenges faced by ZIMRA.
1.2 ZIMRA’S BUSINESS MODEL
Neilsen and Bukh (2011) identify three types of business models, that is, a generic
business model, a broad business model and a narrow business model. ZIMRA’s
business model will be analysed using elements from the broad business model. A
broad business model focuses on the whole enterprise system and encompass
elements and linkages that enable value creation including how an organisation is
positioned according to its partners. Bell, Marrs , Solomon and Thomas(1997) in this
3
vein identify six components of a business model which are business processes, core
products and services, external forces, customers, alliances and markets.ZIMRA’s
business model will be analysed by focusing on four key elements which are its
customers, profit formula, key resources and key processes.
1.2.1 CUSTOMERS
ZIMRA has a wide range of clientele who range from individuals, partnerships
corporate clients and freight agencies. ZIMRA appreciates the importance of its
clients as the backbone of its operations as a revenue collection entity. It
therefore strives to continuously improve services it renders to its clients by
bringing convenience to the transacting public and satisfactory service
delivery.Inthis regard ZIMRA introduced a Tax Payers Appreciation Day in 2011
inorder to honour and appreciate clients who pay their taxes in full and on time
and also conducts a client satisfaction survey bi-annually in a bid to improve
service delivery in line with its value proposition “We are here to serve”.
1.2.2 PROFIT FORMULA
ZIMRA’s mandate is to collect revenue on behalf of the state and to facilitate
trade and travel. To this end the Ministry of Finance and Economic
Development is responsible for setting targets for ZIMRA to meet on a quarterly
and annual basis. ZIMRA therefore strives to come up with strategies which
enable it to meet the set targets.
1.2.3 KEY RESOURCES
Human resources and information technology infrastructure are ZIMRA’s key
resources. ZIMRA has an educated workforce which enables it to deliver its
mandate. Further ZIMRA relies to a large extent on its information technology
infrastructure to enable it to have an efficient link with its customers who are all
over the country and its stakeholders.
4
1.2.4 KEY PROCESSES
The key processes used by ZIMRA are Asycuda World which is used to support
customs related processes such as payment of duty and clearance of goods,
Systems Application Product (SAP) which is used to support tax payments such
as Pay As You Earn (PAYE) for both individuals and corporates, Capital Gains
Tax and Value Added Tax (VAT). SAP is also used to support internal processes
such as human resources processes like the payroll leave applications,
procurement processes amongst other things.
1.3 MACRO ENVIRONMENTAL ANALYSIS
There are divergent views as to what constitutes the environment in literature. Okoh
and Munene (1986) postulate thatthe environment is a set of general economic, social
and technological conditions. On the other hand Obasan (2001) views the
environment as the sum total of institutions, social forces and physical forces that are
relevant to the both organisational goal setting and attainment which members are
cognisant of when making business decisions and plans. Osuagwu (2001) defines the
environment as the totality of factors that determine, influence or affect the
performance or operations of a business. Olarewaju (2012) states that the
environment is an amalgamation of tangible and intangible factors that provide the
lifeblood for the organisations success by providing a market for its services and
products and by providing resources to others. Johnson, Scholes and Whittington
(2008) posit that the environment gives organisations their means of survival and is
also a source of threats. According to Grant (1999) the environment comprises of
factors which include the political, social, legal, technological, demographic,
behavioural and natural resources.
The macro environment within which ZIMRA operates will be evaluated using the
PESTEL framework.
5
1.4 PESTEL FRAMEWORK
1.4.1 POLITICAL ENVIRONMENT
According to Barney & Hesterly (n.d.) the political dimensions of an
organisations general environment impact on business together with the
relationships between government and business. The political environment plays
a fundamental role in ZIMRA’s operating environment as the revenue collector
on behalf of the state. In particular, government policies have a great impact on
business operations. If government policies are favourable for businesses it
means that they will be more investments and businesses will thrive and flourish
thereby increasing the tax base. On the other hand if government policies
adversely affect business operations it will result in revenue shrinkages as
businesses scale down operations, closedown or become unprofitable or if
investors shun doing business in the country.
The political environment also plays a very important role in ZIMRA’s operation
and have a great impact in its performance. For instance Ministry of Finance and
Economic Development (hereinafter referred to as the Ministry) is ZIMRA’s
parent Ministry and it sets revenue targets for ZIMRA to achieve. Further,
political stability plays a crucial role in ZIMRA’s operating environment as it can
have a positive or negative impact on revenue collection. The inclusive
government which was formed in 2009 had a positive impact on the business
environment as it instilled confidence in investors. This saw an increase in
revenue collections which translated in ZIMRA surpassing the Ministry’s
revenue targets in 2010 by 17%, 2011 by 11%and in 2012 by 1% (ZIMRA
Revenue Performance Reports 2010, 2011 and 2012).
However, with the ending of the inclusive government in 2013 there was a
significant drop in revenue collections as ZIMRA failed to meet revenue targets
in 2013 by 6% (ZIMRA Revenue Performance Report 2013). Some critics have
attributed this to the end of the inclusive government as uncertainty was created
in the business environment which resulted in more businesses closing down,
6
with investors pulling out of Zimbabwe and with uncertainty about the currency
which would be in operation amongst other reasons.
The Ministry also approves ZIMRA’s annual budget and this has an impact on
ZIMRA’s operating business environment as it determines the resources that
ZIMRA will have at its disposal to operate efficiently. For instance the budget
allocation has an effect on the salaries, capital expenditure amongst other things
which affect ZIMRA’s efficiency and operations.
ZIMRA is also accountable to the Ministry and Minister can give ZIMRA
directions on policy matters in terms of the Revenue Authority Act. ZIMRA’s
operations are also affected by government policy guidelines which include the
Minister’s Budget Statement, Economic Policy Statements, Commission of
Inquiry into Taxation and Adhoc Committees which recommend changes to
policy and tax administration and international conventions. The Minister is also
responsible for promulgating subsidiary legislation which is administered by
ZIMRA.
1.4.2 ECONOMIC ENVIRONMENT
The economic environment has been defined as the overall health of the
economic systems within which a firm operates (Barney et al. n.d.). ZIMRA’s
operating business environment is to a large extent affected by the economic
environment as it has a positive or negative effect on business operations.
ZIMRA’s operating environment was greatly affected by the unstable economic
environment that was prevalent prior to 2009. However, the economic
environment improved tremendously since 2009 with the formation of the
inclusive government.
In 2009 “runaway” inflation was brought to a halt with the introduction of the
multicurrency which had a positive impact on business operations which saw an
increase in revenue flows though the revenue target was not met (ZIMRA
revenue report 2009). In 2010 ZIMRA’s operations and revenue collections were
positively affected by the steady economic growth which prevailed in the
7
economy. However, there were some pitfalls which constrained businesses as
they were negatively affected by other economic shocks such as high utility
costs, liquidity crunch, insufficient credit lines which posed challenges to
investment opportunities. Further, industries suffered from undercapitalization,
low capacity utilisation which remained below 50% in many companies
andinefficiency due to use of obsolete machinery thus consequently impacting
negatively on revenue collections (ZIMRA Revenue Performance Report for
2010).
2011 saw the revenue performance base for ZIMRA increasing due to improved
capacity utilisation in the economy which resulted in business performing better.
2012 on the other handwas characterised by low growth rates in the economythan
anticipated which resulted in the Ministry revising economic targets
downwards(ZIMRA Revenue Performance Report 2012).The Mid-Term Policy
Review for 2012 saw the Gross Domestic Production that had been projected to
grow by 9.4% being revised downwards to 5.6% and finally to 4.4% in the 2013
Budget (ZIMRA Revenue Performance Report for 2012). ZIMRA’s revenue
targets were also reviewed downwards and ZIMRA was able to surpass the
revenue targets by 1%.
There were a lot of challenges in 2013 which negatively affected businesses. The
economic environment was described by the Minister in the Budget Statement
(2013) as a “long winter of despair characterised by low business and investor
confidence, some disequilibrium in the economy, little growth and employment,
declining social indicators and generally a lackadaisical business as usual
mentality”. The Minister further stated that 2013 looked bleak due to a number of
factors including but not limited to deeper global outturn, continued capital
deficit, instability in the financial sector and a poor business climate (Budget
statement, 2013). Indeed 2013 was characterized by revenue shrinkage which
consequently resulted in lower corporate taxes, Pay As You Earn, excise duty
amongst other revenues being collected and resulted in ZIMRA failing to meets
its revenue targets by 6%. However, in the first quarter of 2014 ZIMRA
managed to surpass revenue targets by 2% despite economic challenges that are
8
being faced and this has been attributed to follow ups and special audits that have
been carried by ZIMRA (ZIMRA Revenue Performance Report 2014).
1.4.3 SOCIAL – CULTURAL ENVIRONMENT
The social- cultural environment includes traditions, values, beliefs norms and
the demographics of a nation. The social cultural environment affects ZIMRA’s
operating business environment. In particular, the age, level of education and life
expectancy and cultural beliefs have an impact on trade which ultimately affects
revenue collections. Currently there are high levels of unemployment in
Zimbabwe which has resulted in most people being employed informally and
resorting to cross border trade. This has also resulted in more people evading tax
as the informal sector is difficult to tax and is often referred to as the “hidden
economy” although there is a lot of money in this sector which is unaccounted
for. Although there is presumptive tax for people in the informal sector, it is
difficult to enforce thus this sector remains untaxable to a large extent. The age
of citizens also affects ZIMRA’s operating business environment as certain
transactions of people who are above the age of 55 years are not taxable in terms
of the law. The life expectancy also affects the tax base as low life expectancy
means lower Pay As You Earn and will in turn affect business operations
resulting in lower taxes. Cultural beliefs also impact on ZIMRA’s operating
business environment as this affects the level of trade, imports and exports which
in turn affects customs duty.
1.4.4 TECHNOLOGICAL ENVIRONMENT
Technological change creates both opportunity, as firms begin to explore how to
use technology to create new products and services and threats as technological
change forces firms to rethink their technological strategies (Barney et al. n.d.).
The technological environment in Zimbabwe is rapidly developing and greatly
affects ZIMRA’s operating business environment. Zimbabwean companies are
adapting well to changes in technology and there are a lot of companies such as
Econet Wireless (Pvt) Limited, Africom, Telone (Pvt) Limited, Netone amongst
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others which are providing internet services and have moved to fibre optic which
carries more bandwidth at faster speed. There has also been rapid development of
networks in Zimbabwe and efforts are being made to move to cloud computing.
ZIMRA has invested heavily in infrastructure and information technology which
includes being the pioneer in the region in introducing Asycuda World System.
ZIMRA has also introduced fiscal registers, e-banking, SAP, CCTV and scanners
amongst other things.
1.4.5 LEGAL ENVIRONMENT
The legal environment comprises of laws and the legal systems impact on
business (Barney et al.n.d.). The legal environment plays a fundamental role in
ZIMRA’s operating business environment. To begin with ZIMRA itself is a
creation of statute and thus has to comply with the Revenue Authority Act.
Further, ZIMRA administers various legislation such as the Income Tax Act,
Customs and Excise Act, Value Added Tax Act, Stamp Duty Act amongst other
Acts and subsidiary legislation. Thus ZIMRA’s powers are limited to those that
are stated in the various legislation it administers and cannot act ultra vires this
legislation. Further, the judiciary also plays an important role in ZIMRA’s
operating business environment as it is responsible for interpreting the various
Acts that ZIMRA administers. In this vein the rate of cases that are heard at
courts and the rate at which judgments that are handed down also affect both
ZIMRA and the tax payers. For instance there is a back log of cases in the Fiscal
Appeals Court and other courts which is negatively affecting operations as
parties remain in limbo in respect to certain legal principles which are quite key
and pertinent to be established.
1.5 SWOT ANALYSIS FOR ZIMRA
SWOT analysis is a strategic analysis of strengths, weaknesses, opportunities and
threats which helps in evaluating internal factors of an organisation that are likely
to influence the operations of the business (Anonymous). Strengths and
opportunities are positive factors which help ZIMRA improve its operations and
10
efficiencies and positively affect the operating environment whilst threats and
weaknesses are negative factors that affect operations and can affect business
continuity and adversely affect the operating environment.
1.5.1 STRENGTHS
ZIMRA has number a number of strengthens which positively influences its
operating environment. One of ZIMRA’s strengths is that it is a monopoly hence
faces no competition though it can be argued to a lesser extent that this is a
weakness. ZIMRA also has highly technical, skilled and innovative workforce
which is vital as human resources are core in ZIMRA’s operations.
ZIMRA also has strong ICT infrastructure and competencies as evidenced by the
implementation of SAP, ASYCUDA World, e-banking, fiscal registers, CCTV
and scanners. Further, ZIMRA has good relations with stakeholders for example
government, Regional and International Customs agencies and some taxpayers.
ZIMRA also has good communication skills and educational programmes to
educate tax payers for example “Did you know” columns that are broadcast in
newspapers and the tax payers’ appreciation day.
ZIMRA’s other strength is that it gives back to society by carrying out social
responsibilities programmes for example annual Charity Ball where proceeds are
donated to various institutions in need, adoption of various charities by its
divisions, sponsoring scholarships for the under privileged amongst other things.
ZIMRA’s operations are backed by legislation which is another strength that it
has as it has the power to enforce and administer the laws that relate to its
operations and is also empowered to sanction offenders by the various acts it
administers.
ZIMRA also has an internationally accredited training centre where it constantly
provides training for its employees which is essential in ensuring that it retains a
11
highly competent workforce. ZIMRA also has a good corporate image which is
another strength that it has.
1.5.2 WEAKNESSES
ZIMRA has a number of weaknesses which affect its operations and service
delivery. For instance there are a lot of tedious border clearance processes which
make borders a breeding ground for corruption, smuggling and results in a lot of
dissatisfied clients.The legislation and regulatory framework that is administered
by ZIMRA is also complex and fragmented and results in a lot of lengthy
litigation and challenges.ZIMRA also has high levels of corruption within the
organisation which has resulted in lot of revenue leakage and
inefficiencies.ZIMRA also has a bureaucratic decision making processes which
makes decision making long and unconducive for business.
1.5.3 OPPORTUNITIES
There are a number of opportunities for ZIMRA and these include potential
revenue from the untapped “hidden economy”. Creation of strategic partnerships
also pose as opportunities which ZIMRA can explore to help improve operational
efficiency and provide better services to clients. ZIMRA further has the ability to
adapt to the changing economic environment by amending various laws it
administers and by having the ability to adapt to various technological changes in
its sphere of operation.
1.5.4 THREATS
ZIMRA faces a number of threats which act as obstacles that hinder its effective
operations. For instance economic activities negatively impact revenue
collections such as liquidity crunch. Business constraints such as low capacity
utilisation and company closures are also a threat to ZIMRA’s operations. Loss
of foreign investment to regional competitors is also a threat to ZIMRA’s
12
operations as this results in reduced revenue collections. Corruption, tax evasion
and briberyare also threats to ZIMRA’s operations.
1.6 STATEMENT OF THE PROBLEM
Customs administration is a technical and specialised area which raises a lot of
controversy as tax collectors are often viewed in a bad light by the general populace
due to various reasons. This is further compounded by administration challenges
which pose serious problems to ZIMRA as they affect operational efficiency and
effectiveness and impede ZIMRA from effectively fulfilling its mandate of revenue
collection and trade facilitation. In as much as there is a lot of resistance to payduties
and taxes and despite the negative connotations associated with tax collection, the
undeniable truth is that revenue collection is integral and plays a fundamental role in
the sustainability of a country and in the livelihood of its citizens. It therefore takes
effective strategic planning and strategic choices in order to have an efficient and
effective customs administration system in place. The question which remains is
whether ZIMRA’s investment in IT has paid dividends in curbing custom
administrative challenges?
1.7 OVERALL OBJECTIVE
The overall objective of this study is to assess the effectiveness of automation as anIT
intervention in curbing customs administrative challenges in ZIMRA.
1. Identify the customs administrative challenges faced by ZIMRA.
2. Identify areas where automation has succeeded as an IT intervention in
curbing customs administrative challenges in ZIMRA.
3. Ascertain areas where automation has failed as an IT intervention in curbing
customs administrative challenges in ZIMRA.
4. Find whatchallenges impede the effectiveness of automated systems
5. Make necessary recommendations following findings from the study.
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1.8 MAIN RESEARCH QUESTION
How effective is automationas an IT intervention in curbing customs administrative
challenges faced by ZIMRA.
1.9 RESEARCH SUB QUESTIONS
The research sub questions are:
1. What are the customs administrative challenges faced by ZIMRA?
2. In which areas has automation succeeded as an IT intervention in curbing
customs administrative challenges in ZIMRA?
3. In which areas has automation failed as an IT intervention in curbing
customs administrative challenges in ZIMRA?
4. What challenges impede the effectiveness of automated systems?
5. What recommendations can be made following findings from the study?
1.10 RESEARCH PROPOSITION/MAIN ARGUMENT
The study’s proposition was:
Automation has been effective in curbing customs administrative challenges in
ZIMRA.
1.11 JUSTIFICATION OF THE STUDY
The study is important because it will assist ZIMRA and other policy makers in
coming up with strategies to effectively utilise IT infrastructure to curb customs
administrative challenges. This may lead to increasedrevenue performance. The
study might reveal loopholes in the system which will allow ZIMRA to take
14
appropriate remedial actions to eradicate the loopholes or minimise the effects
thereof. The study will equip ZIMRA management with knowledge on how to
use IT to make effective decisions in the day to day operations of the business
and how to channel resources more effectively.
The study will also be of academic value and will add to the existing body of
literature of how IT can be used to improve customs administration in Zimbabwe
as the literature in this field is limited.
The study will also benefit other stakeholders such as importers, exporters,
clearing agents, government and the general public by recommending more
efficient use of IT interventions to bring more convenience and operational
efficiency to the transacting public.
1.12 SCOPE OF THE RESEARCH
The study seeks to assess the effectiveness ASYCUDA as the automation system
in ZIMRA in curbing customs administrative challenges in ZIMRA.The study
will cover the respondents from ZIMRA’s customs division and clearing agents.
1.13 DISSERTATION OUTLINE
Chapter one is an introduction to the study topic and gives insight into the
background of the study and the company. The chapter also explores the
business model used by ZIMRA, the statement of the problem, research
objectives, research questions, research proposition, the justification of the study
and the scope of the research.
Chapter two covers the literature review of the study vis a vis the objectives of
the study. The literature review helps to set the foundation of the research by
providing insights into the established principles of the study and also aids to
identify gaps in the research area.
15
Chapter three focuses on the research methodology used by the researcher to
conduct the study. It gives an outline of the framework used to conduct the
research and perform data collection which will be used for analysis in chapter
four.
Chapter four covers data presentation, analysis and research findings.
Chapter five provides the conclusion of the study and gives a summary of the
research findings and recommendations.
1.14 CHAPTER SUMMARY
This chapter gives a detailed account of the background to the study and the
background of ZIMRA which is the organisation understudy. The chapter
outlines the importance of information technology in the ever changing global
environment we operate in and the strides that ZIMRA has taken to keep abreast
with information technology vis a vis the challenges that are faced in customs
administration.
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CHAPTER 2
LITERATURE REVIEW
2.0 INTRODUCTION
This chapter explores the existing literature on the topic under study. According to
Bourner (1996), the purpose of literature review is to identify gaps in the literature
pertaining to the study, to build on existing knowledge, to provide background
knowledge to the study and to gain academic insight of the problem and ascertain
various trends that have occurred. The chapter gives insight into revenue
administration, customs models, challenges faced by customs administrations,
automation of customs administration, benefits of customs automation, off the shore
IT systems vs in-house development of automated systems, core functionalities of
customs ICT systems and the types of systems used in customs administration. The
chapter also focuses onhow ASYCUDA has helped to curb customs administrative
challenges, factors which impede the effectiveness of ASYCUDA and gives
comparative analysis and provides a conceptual framework and a synthesis of the
literature.
2.1 REVENUE ADMINISTRATION
Tax and customs administration plays a fundamental role in restoring macroeconomic
balance and economic growth (Bird and Casanegra de Jantscher, 1992). Customs and
tax administration is an audacious task, and most effective administration does not
only entail collecting the most revenues or enforcing tax compliance through
penalizing non-compliance, but effective administration also depends on both private
and public actions (and reactions), aided by a complex interaction between various
environmental factors, which also include substantive and procedural tax law, and the
outcome of a given administrative effort (Bird, 2003). Effective administration
entails adapting to the global changes and looking for more effective and efficient
ways to encourage voluntary compliance through ease, low costs and convenience
17
which can undoubtedly be achieved through information technology. By adapting and
adopting appropriate technologies as well as by being open to the benchmarking and
testing of their operations to achieve “best practice”, good revenue authorities
improve both their public image and the organisation (OECD 2012). Revenue
authorities must constantly review their operating procedures by coming up with
simple and user friendly procedures and systems to ensure efficient, effective and
optimal utilisation of resources and to encourage voluntary compliance (Bird 2003).
2.2 CUSTOMS MODEL
THE REVISED KYOTO CONVENTION (RKC)
The revised Kyoto Convention is regarded as the blueprint for efficient and modern
customs procedures. Zake (2011) posits that the RKC is the accepted point of
reference for key principles of customs modernisation. The revised convention
incorporates application of new technology and modernisation initiatives and is
regarded as being instrumental in development of global customs procedures. The key
elements to be applied by modern customs administrations are the use of automated
systems, electronic funds transfer, risk assessment and selectivity control through pre-
arrival information amongst others things. To date they are ninety two contracting
parties to the RKC including Zimbabwe.
2.3 CHALLENGES THAT ARE FACED IN CUSTOMS ADMINISTRATION
Customs administrations face a plethora of challenges which ultimately hinder their
performance and have a negative impact on service delivery and perceptions of clients
and or taxpayers. According to the World Bank (2005) many countries face
challenges in attaining transparency and efficiency in customs operations. Another
challenge identified by the World Bank is that customs departments have to deal with
increased trade volumes without proportional increase in resources or staff. This
position is supported by Gemme (n.d.) who posits that challenges arise due to fact
there are huge volumes of traffic at borders, that is passengers and goods that need to
18
be cleared therefore making it very costly to clear goods due to the fact that,
examination of goods and reviewing documents have to be done for every transaction
in the most professional, efficient and effective way possible. The World Bank (2005)
has attributed seventy five per cent of trade facilitation delays to administrative
hurdles like clearance of goods, cargo inspections and customs and tax procedures.
This is further supported by Zake (2011) who asserts that customs administrations
operate in a complex and dynamic environment that deals with for example, an array
of traders, rules that determine origin of goods, classification of goods, tariffs and
valuation differences. Changes in the operating environment of customs
administration also pose challenges and add credence to the fact that they need to
modernize and adjust processes (World Bank 2005).
Customs administration challenges include revenue fraud, smuggling, proliferation of
trade agreements both regional and bilateral which make it more complex to
administer border controls and formalities, security issues such as terrorist attacks and
organized crimes and continuously dealing with sophisticated and demanding clients
thus placing a heavy burden on customs administrations (The World Bank 2005 and
the OECD 2009).
Sieng (n.d.) also cites customs corruption as one of the challenges to effective revenue
collection which deprive government of much needed revenue and undermines tax
administration and this position is also supported by the Afghanistan Customs
Department. According to Cantens, Raballand and Bilangna (n.d.), “many Customs
administrations have suffered from corruption and struggled to identify options for
ameliorating this malady”. This is further supported by ITD(2010) which states that
tax administration is highly prone to corruption, tax evasion and fraud perpetrated by
taxpayers and its employees. According to the World Customs Journal (2011) goods
are often smuggled into African markets as a result of collusion between traders and
customs officials. Other challenges faced by customs administrations are illicit
trading of counterfeit goods which have been cited in countries like Zimbabwe,
Tanzania and Togo, which the OECD has estimated to cost billions in lost revenue to
government and lost profit to businesses (Worlds Customs Journal 2011).
19
High costs of collection are also another administrative challenge for revenue
authorities. Cost of collection is affected by various factors such as the structure and
distribution of taxpayers, number of employees and salary costs, effectiveness of
procedures and revenue administration system and tax policy and system (ITD 2010).
Chisembwere (2010) identifies meeting government revenue targets as one of customs
administration challenges. Other challenges identified by Chisembwere (2010)
include promoting economic growth, deterring criminal activities, facilitating trade of
legitimate goods and persons, enforcing laws, operational procedures, proliferation of
trade agreements, technological changes and inadequate resources, that is financial,
human and infrastructure.
Other challenges faced by customs administration include but are not limited to
corruption (Zake 2011), cumbersome and bureaucratic procedures, systems failure,
and bad reputation amongst other things. According to Cantens, Raballand and
Bilangna (n.d.), Customs administrations sufferfrom corruption and have struggled to
find solutions for ameliorating this malady. This is further supported by ITD (2010)
which postulates that tax administration is highly prone to corruption, tax evasion and
fraud perpetrated by taxpayers and its employees. Hors (2001) also asserts that
corruption is deeply entrenched in customs administrations more so those in
developing countries and affects customs efficiency and is a major curtailment to
trade expansion.
High costs of collection are also another administrative challenge for revenue
authorities. Cost of collection is affected by various factors such as the structure and
distribution of taxpayers, number of employees and salary costs, effectiveness of
procedures and revenue administration system and tax policy and system (ITD 2010).
Keen (2003) also identifies smuggling as a major challenge in customs administration
but is however quick to posit that the term smuggling is imprecise as it includes a
wide range of illicit activities such as under declaring goods or under valuations and
not necessarily the physical concealment of goods only.
.
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2.4 AUTOMATION OF CUSTOMS ADMINISTRATION
Automation of customs procedures is an integral part of customs reform and
modernisation and plays a vital role in trade facilitation and this has been underscored
by international organisations such as OECD, The World Bank, WCO and UNCTAD
(World Customs Journal 2009).The Commission for Africa in its 2005 report states
the urgent need to have customs reformed and it has also been noted that most African
customs administrations are taking initiatives to reform and modernize customs
process through automation as countries become aware of the need to create a
conducive environment for business and the need to reduce business costs to enhance
investment for economic growth (World Customs Journal 2009).The report further
notes that Africa suffers from the highest average customs delays in the world
averaging on 12 days clearance of goods whilst Estonia and Lithuania require one day
for customs clearance with Ethiopia averaging 30 days with customs delays adding to
over 10 per cent of export costs (World Customs Journal 2009).
Revenue authorities are striving to enhance utilisation of IT systems in order to
receive maximum benefits of the same and to improve the reliability of electronic
self-help services. It is imperative for revenue authorities to leverage on IT functions
to support its operational activities and the whole organisation at large (Crandall and
Kidd 2010).
According to the Wulf and Sokol (2005) all information and communication
technology promotes customs modernisation and can assist customs administrations
to improve efficiency, security and transparency. Wulf et al. (2005) also points out
that ICT for customs administration is not a solution or an end in itself but when
managed and implemented properly can be a formidable tool in achieving effective
customs administrations. However, the benefits of ICT can be undermined by
continuing to use outdated manual procedures alongside ICT practices and by failing
to streamline customs procedures (Wulf et al. 2005). Customs administrations must
therefore integrate ICT systems which are appropriate to the country’s operating
environment and infrastructure with modern practices in order to be effective and to
achieve its long term objectives (Wulf et al. 2005).
21
According to Crandall and Kidd (2010) countries all over the world have embarked
on major customs and tax administration modernising reforms which have been
instigated by the governments’ desire to increase revenue flows, improve voluntary
compliance by taxpayers through improved services and greater convenience to
taxpayers, reduce tax administration costs, improve efficiency and productivity and to
improve staff skills. IT has been used to automate systems in revenue authorities to
bring uniformity in payment processes, to collect, organize and disseminate
information using dependable databases and a common identification number, to
ensure that there is a uniform application of procedures and legislation and to provide
sufficient and suitable information for decision making (Crandall and Kidd 2010).
Automation of revenue administration functions through electronic service delivery
reduces corruption and helps to detect corrupt behavior though automated systems
still run the risk of security breaches internally and externally (Crandall and Kidd
2010). Automation of customs administrations helps to create a paperless
environment through electronic submissions of documents, enables faster exchange of
information, enables more effective use of information received, results in enhanced
taxpayer compliance and enables timely detection of violations by customs
administrations (Simpson 2009).
Automated systems play a significant role in trade facilitation by reducing clearance
time and increasing transparency in duty and tax computations and allow for detection
of fraud thereby benefiting both the government and traders (World Customs Journal
2011). Automation helps to facilitate trade more efficiently, increases productivity,
improves valuations, reduces corruption and smuggling and increases revenue flows
(Yasui and Engman, n.d.).
Efficient use of information and communication technology is imperative for efficient
revenue collection, consistent application of customs law, efficient clearance
procedures, risk management, data analysis and computation of trade statistics (World
Customs Journal 2011). However, even though automation is an indispensable tool in
customs modernisation and trade facilitation it is not panacea in itself and can only be
effective if it is supporting the implementation of modern customs management
practices (Yasui et al.n.d.).
22
In the United Kingdom information technology has been identified as an
indispensable ingredient for revenue collection. Revenue collection in the United
Kingdom has increased by more 90% with the implementation of computer based
revenue collection system. Comparative studies in the United Kingdom and United
States have revealed that the collection system used in the United States is more
effective than the one used in the United Kingdom due to the fact that usage of
technology is higher in the United States (Tayib 2000).
2.5 BENEFITS OF CUSTOMS AUTOMATION
According to the World Customs Journal (2009) the primary benefits of automation
that have been identified by UNCTAD, OECD and WCO are:
i. Reduced corruption due to improved transparency and predictability of
decision making.
ii. Increased revenue collection due to automated computation of duties and
taxes, in built controls and uniform application of the law.
iii. Faster clearance procedures due to automated processes which enable
electronic transmission of information such as declarations and allows
information to be processed prior to the arrival or departure of goods and
enables risk profiling to be done in advance.
iv. Streamlining of customs procedures by differentiating payment of duties and
taxes from physical clearance of goods.
v. Reduced physical inspection of goods.
vi. Improved management information systems which enables faster and
informed decision making.
vii. Electronic filing of declarations using direct trader input through the internet
or electronic data interchange.
2.6 OFF THE SHELF IT SYSTEMS VS IN-HOUSE DEVELOPMENT OF AUTOMATED SYSTEMS (NATIONAL SYSTEMS)
Customs administrations can either acquire off the shelf IT systems or develop
national systems that are tailor made to meet their national needs (The World Bank
2005). The IMF (2003) argues that off the shelf software such as SOFI, TIMS,
23
ASYCUDA, or MicroClear are less costly than developing software. The World Bank
(2005) also postulate that off-the-shelf solutions have the advantage of having been
tried and tested and also have the possibility of adding separate modules to meet the
requirements of the administration, are stable and robust and incorporate advanced
technologies. Off the shelf software is widely used and there are external experts who
can assist customs administrations and have the further advantage of using
international standards (IMF 2003). However, these systems lack flexibility and
maybe costly to upgrade or change and reliance on external experts makes countries
dependent on external services (IMF 2003).
The advantages of national solutions is that they are adapted to suit the specific
requirements of a specific country and are suitable for facilitating the systems
development and maintenance though this can be costly and difficult to implement
especially when complex transactions and volumes need to be dealt with (The World
Bank 2005). Further, in house systems are more costly to develop and are often not
well designed (IMF 2003).
2.7 CORE FUNCTIONALITIES OF CUSTOMS ICT SYSTEMS
According to various literature from WCO (2004), UNCTAD (2008) and Baioni and
Bhatia (2005) cited in the World Customs Journal (2009), the following have been
identified as the fundamental functionalities or modules of customs ICT system:
i. Declaration processing – to enable the capturing and processing of data for the
computation and collection of duties and taxes.
ii. Payments and accounting – to record and account for payments made by
traders.
iii. Cargo control – to ensure proper clearance of goods through monitoring of
imports, exports and transit goods.
24
iv. Risk management – this involves the identification and selection of high risk
consignments which attract a lot of duty and tax or may prompt traders to
smuggle or conceal in order to evade payment of duty and tax.
v. Statistics and reporting – which involves producing management reports by
obtaining data from various government departments and dissemination of
foreign trade statistics.
vi. Intelligence and enforcement – this involves the compilation and exchange of
data to allow for compliance, risk profiling and enforcement.
vii. Communication gateway – to provide efficient and effective access to customs
processing systems by government agencies and traders.
2.8 TYPES OF SYSTEMS USED IN CUSTOMS ADMINISTRATION
There are a variety of systems that are available for customs administration to use in
the automation of customs processes which include off the shelf solutions like TATIS,
ASYCUDA, MicroClear, SOFIX, PC Clear, IBM Customs Agency Solutions, Oracle
Customs Framework or in house national systems as was done in Australia, USA and
UK (World Customs Journal 2009). It has however been asserted that there is no
system which can be said to be in the lead as all systems have their pros and cons and
have a significant cost regardless of whether they are sold at a fee or are offered for
free (Asian Development Bank 2003). It is therefore difficult to make direct
comparison between similar customs applications packages (Asian Development
Bank 2003).
The researcher will give an outline of the main systems that are available for
comparative purposes but will dwell more on ASYCUDA which is the system that is
being utilised in the case study underhand.
25
Table 2.1 on the below shows the different systems that are available for customs
administrations to choose from in order to automate their processes.
Table 2.1 Status of systems and suppliers
SYSTEM SUPPLIER COMMENT
ASYCUDA UNCTAD The most installed system
ASYCUDAWORLD UNCTAD New internet based
system
TATIS Tatis S.A Complete system from
knowledge management
viewpoint
SOFIX Douanexport (France) Limited penetration
UAIS (Russia) Russian Customs Basic, but a real player in
the industry
UAIS (Kazakhstan) Kazak Customs More advanced but not all
modules implemented
National Systems Various Unlikely to be well
supported
Bespoke Systems Various High risk but success
established
Source: Customs Information and Communication Technology, Working Paper No.4
(2003)
2.8.1 TATIS
TATIS provides an integrated knowledge management solution through tools and
methods for capturing, validating, analyzing and delivering customs data to critical
users. Its key elements include compliance management which encompasses transit
and warehouse quality control, risk management, industry and company assessments
and human resource development. The system also has declaration processing which
covers all imports and exports, suspense regime management which covers
warehousing, transit and bonded manufacture. There is also enforcement technology
which encompasses supply and delivery mechanisms through tracking solutions,
reporting, post entry audits and mobile task force solutions and a Smart Document
26
which carries confidential enforcement and risk data to border points. TATIS is also
compatible with other customs systems such as ASYCUDA and has formed strategic
alliances with various service providers(this information was obtained from Asian
Development Bank 2003).
2.8.2 TIMS
TIMS is an abbreviation for Trade Information Management System. Crown Agents
who offer TIMS refer to it as “a powerful investigative tool that undertakes risk
analysis, price comparison and manages intelligence data”. TIMS is also designed to
reduce fraud and enables the accurate collection of revenue. It also has an
intelligence electronic seal for transmission of data, that is, an I-Seal which enhances
security of data and records any interference with it. TIMS is compatible with other
systems such as bespoke system and can also be tailor made to suit specific
organizational needs and can be web enabled. Its benefits include improved revenue
protection, timely and accurate trade statistics, quicker clearance through faster
processing of declarations, improved trade facilitation and enables resources to be
utilised in an efficient manner. However, its application is still limited when
compared to ASYCUDA. The preceding information was obtained from (Asian
Development Bank 2003).
According to Haxhidauti (1999) TIMS has been implemented in Kosovo and is split
into .three modules which are TIMS Central, which covers data from traders and is
maintained manually, automatic calculation of duties and taxes from tariff reference
tables, fright costs to process customs clearance of goods, tariff codes, valuation of
goods, exchange rates, risk management and an intelligence module. The second
module is TIMS local which covers SAD preliminary declarations and SAD
processing. The last module is Crown Agents Application software which was
developed by Crown Agents to provide communication support between cites were
TIMS application is installed.
2.8.3 SOFIX
SOFIX is a French system that was developed in the 1980s by Douanexport. It was
developed for the processing of maritime import and export and uses UNIX. This
27
system has also not been widely installed though it was installed in a few African
countries (Asian Develpoment Bank 2003). SOFIX is being used in Morocco and is
based on an open architecture which allows internal modification by information
managers. SOFIX enables the exchange of information with traders such as free
estimates of taxes and duties payable at importation, status of accounts, filing of
declaration, status of importations and progress of customs operations monitoring of
payments of duties, taxes and clearing times (The World Bank 2002).
2.8.4 UAIS(the following information was obtained from (Asian Development Bank
2003).
This system was developed by the Russian Customs and stands for Unified
Automated Information System and is provided free of charge to other countries. The
hardware and software domains of the system are decentralized and use local
computing networks. It uses a client-sever / web server architecture and has database
management systems, information storage and archive devices, routers and network
equipment and operational system Solaris.
2.8.5 CCIS(the following information was obtained from (Asian Development Bank
2003).
CCIS is an abbreviation for Computer- Aided Information Systems which was
developed by Accept Corporation for Kazak Customs. The system comprises of the
following components, transit, foreign trade statistics, customs banking currency
control, control of licensing and quotas, accuracy and completeness in customs
charges, warehousing, free economic zones and confiscated goods, information
support of tariff regulation, smuggling and other violations and safety within the
Customs Service and customs registration of cargo and international copy rights.
CCIS runs in parallel with a manual paper system and little evidence has been
established to show that it has improved the rate at which goods are cleared though
there has been improved control. The system has also been described as complex and
costly to develop.
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2.8.6 ASYCUDA(the following information was obtained from the ASYCUDA
website)
ASYCUDA is an abbreviation for Automated Systems Customs Data and is a
computerized customs management system which deals with trade procedures,
customs declarations, manifests, accounting procedures, warehouse manifest, transit
and suspense procedures. UNCTAD developed ASYCUDA in order to facilitate trade
and to promote economic development.ASYCUDA was introduced to strengthen
customs administrations’ capacity through the use of modern and reliable systems that
bring about reform in customs clearance processes through the aid of computers by
simplifying procedures, speeding up clearance processes, reducing administrative
costs, increasing customs revenue by ensuring proper declaration of goods, accurate
calculations of duty and taxes and by enabling accurate reporting of statistics. The
objectives of the ASYCUDA program is to assist customs administrations
modernisation and reform efforts through efficient clearance controls and facilitation
of legitimate trade, implementation of simplified procedures, harmonized codes,
international standards and uniform application of customs laws and regulations.
Further, Asycuda allows Customs using electronic data interchange for
administration, commerce and transport (EDI) rules and traders to exchange
electronic data. Asycuda can be custom made to suit the individual custom needs of
different countries that is various legislation and national tariffs amongst other things.
Asycuda is being implemented in eighty five countries hence this makes trading
cheaper, simpler and makes international markets more accessible.
Asycuda is also provided free of charge by UNCTAD whilst UNCTAD technical
assistance projects provide training, support activities, implementation of the system,
documentation and product developments on a cost recovery basis. Asycuda strives
to utilize up to date and reliable technologies. Asycuda has four main versions of the
software product which are Asycuda Version 1, Asycuda Version 2 and Asycuda
Version 3 (Asycuda++) and AsycudaWorld.
29
AsycudaWorld the latest version is designed to function in challenging
telecommunications environments and can operate through GSM networks and allows
transactions to be processed through the internet. AsycudaWorld provides support to
customs administrations through enabling trader compliance, control of trade routing
to authorized customs clearance offices, selective examination practice and effective
management of clearance process. ASYCUDA Word has four selectivity lanes for
declarations, that is, a green lane meaning that the declaration is automatically
approved for release though customs reserves the right to inspect the goods, a blue
lane which means the declaration is automatically approved for release subject to post
clearance checks by customs, a yellow lane meaning declarations need a documentary
inspection only, red which means the declaration requires both physical inspection
and documentary check (ASYCUDA World Declaration Processing Broker’s User
Manual).
Asycuda is designed to expedite clearance processes, prevent smuggling, improve
computation and collection of duties and to provide accurate and timely information
for decision making. This is achieved through its ability to trace and monitor duty and
tax payments, application of correct rates of duty and uniform application of the law,
risk management for control purposes, online valuation and databases, automatic
confirmation, authentication and accounting of customs declaration and through the
implementation of systematic working procedures.
2.9 HOW ASYCUDA HAS HELPED TO CURB CUSTOMS ADMINISTRATIVE CHALLENGES
2.9.1 SIMPLIFIED/ STREAMLINED CUSTOMS PROCEDURES
Africa has been found to suffer from the highest average customs delays in the world
averaging on 12 days clearance of goods whilst Estonia and Lithuania require one day
for customs clearance with Ethiopia averaging 30 days with customs delays adding to
over 10 per cent of export costs (World Customs Journal 1). This is mainly due to
cumbersome clearance procedures and numerous documents and processes that have
to be complied with. The implementation of ASYCUDA helps to improve trade
30
facilitation by simplifying customs procedures and documentations, increasing
internet access and providing improved services (www.asycuda.org). According
Farzaneh and George (2014) ASYCUDA helps to simplify customs procedures by
decreasing the number of declarations and attached documents. The implementation
of ASYCUDA in Afghanistan has resulted in reduced customs clearance steps from
fourteen to two, customs documents from ten to two, clearance time from four
hundred and twenty eight minutes to approximately ninety minutes and has seen an
increase in trade volumes by three hundred percent (UNAMA press release, 2010 and
Afghanistan’s customs department). In the Philippines the implementation of
ASYCUDA has reduced the number of signatures that are required from 79 to 5 and
multiple accountable forms that were required to a single administrative document
(SAD) and inward manifest from 13 to 3 copies of electronic documents (Philippines
Customs Department).
2.9.2 INCREASED SPEED OF GOOD’S CLEARANCE
ASYCUDA has increased the rate at which goods are cleared by customs due to the
fact that customs operations are made easier, faster and more efficient through
automation of clearance processes, in built capabilities to support changes in
legislation and organizational structures (www.asycuda.org). Sieng (n.d.) posits that
ASYCUDA quickens the clearance process through streamlining customs procedure
and standardizing trade documents. In Afghanistan clearance time has been reduced
from four hundred and twenty eight minutes to approximately ninety minutes since
the implementation of ASYCUDA and has seen an increase in trade volumes by three
hundred percent and customs revenue by seven hundred percent process (UNAMA
press release, 2010 and Afghanistan’s customs department).
ASYCUDA has helped to expedite processing of customs documents such as bills of
entry and declarations thereby saving traders valuable time in the import and export
process. ASYCUDA has allowed for the introduction of a new declaration process in
Afghanistan which has helped to reduce the clearance process by reducing the number
of customs clearance declarations which used to be five and reduced the number of
clearance steps and signatures from fourteen to three. There is also full automation
31
and electronic clearance process for the whole customs process which has helped to
increase the clearance process (UNAMA press release, 2010 and Afghanistan’s
customs department).
In the Philippines the time taken to release cargo has been reduced from 6 to 7 days
to 4 to 6 hours for the green lane and 48 hours for the yellow and red lane. In Saint
Lucia ASYCUDA has helped to reduce clearance time with green lane clearance and
processing averaging around twenty minutes. According to Uganda Revenue
Authority ASYCUDA has enabled clearance time to be reduced from 5 days to less
than 2 days and has improved voluntary compliance.
2.9.2 REDUCED COSTS. According to Simpson (2009) impervious, inefficient and cumbersome border
procedures increase unnecessary costs for business. The implementation of
ASYCUDA has resulted in reduced costs to both clients and revenue administration
as it minimizes administration costs which helps traders to save money and
computerized warehousing allows for faster calculation of charges and release of
goods thereby reducing costs (www.dominica.gov). ASYCUDA enables transactions
to be done over the internet from anywhere in the world thereby reducing costs to the
transacting public such as travelling costs and costs associated idle time being spent
queuing at border posts (Kamajugo 2014). ASYCUDA is also ecofriendly and allows
for paperless declaration processing by reducing paper usage by 80% in some stations
in the Ugandan Revenue Authority for example, thereby reducing costs associated
with printing and paper usage in revenue authorities.
2.9.3 INCREASED REVENUE
ASYCUDA has benefited revenue administrations by increasing revenue collections
and compliance (UNCTAD 2010). ASYCUDA also increases transparency in duty
and tax computations and allows for detection of fraud thereby increasing revenue
collections (World Customs Journal 2011). This position is also supported by Iranian
Revenue Authority which cites one of the benefits of ASYCUDA to be the prevention
of tempering and forgery of customs control and increased transit monitoring thereby
preventing revenue leakages and increasing revenue collection. In Afghanistan,
32
customs revenue was said to have increased by 700% since the implementation of
ASYCUDA (UNCTAD 2010). ASYCUDA contains an expert valuation system
which minimizes loss of revenue and helps detect under valuations
(www.asycuda.org). Farzaneh and George also posit that ASYCUDA increases
accuracy in valuations thereby preventing revenue leakages and increasing revenue
collections. The Nigerian Services Commission (2012) states that one of
ASYCUDA’s capabilities is that it prevents goods from being removed until all
payments have been met and all requirements fulfilled.
2.9.4 IMPROVED REVENUE STATICS
ASYCUDA enhances accounting, statistics, post clearance audit and information
management capabilities thereby fostering efficient and sound decision making
(www.asycuda.org). According to the Afghanistan Customs Department ASYCUDA
automatically consolidates all customs declarations and is used to produce accurate
and timely statistics and trade data for economic analysis.
2.9.5 UNIFORM APPLICATION OF LAW
ASYCUDA has in-built capabilities to support changes in legislation thereby allowing
uniformity in the application of laws, tariffs and harmonized codes
(www.asycuda.org). The Dominican Republic customs department also states that
one of the benefits of ASYCUDA is that there is availability of tariffs online which
also has the advantage of enabling traders to estimate their tax liabilities beforehand
(www.dominica.gov). The Afghanistan customs department has also found that
ASYCUDA allows for automatic replication of updated reference data such as tariffs
from the central server to local systems which allows the law to be applied
consistently and in an effective manner.
2.9.6 REDUCED CORRUPTION
According to Hors (2001) opportunities for corruption arise due to direct interactions
between officer and traders, laxity of controls and ability of officers to work within a
network of accomplices. Sieng posits that ASYCUDA system helps to reduce
33
opportunities for rent seeking behaviour by processing declarations electronically
thereby reducing the level of direct interaction between officers and traders and helps
to strengthen operational efficiency by increasing transparency of operations thereby
minimizing fraudulent activities, reinforcing institutional capacity and improving data
management. However, Sieng (n.d.) also points out that although ASYCUDA has
helped to minimize corrupt practices it has not deterred evasion and smuggling. This
is supported by the Afghanistan Customs Department which has found that
ASYCUDA has helped to reduce the level of face to face interaction between clients
and officials through electronic processing of documents and electronic payments.
2.9.7 RISK MANAGEMENT
Asycuda has risk assessment and selectivity capabilities and allows use of bar codes
and online access to external database (www.asycuda.org). ASYCUDA and in
particular ASYCUDA World has multi agency risk management processes which
enable border agencies to apply risk profiles during declaration processing (Kamujugo
2014). However, it has been noted that a lot of customs administrations in Africa do
not have effective risk management systems that enable different treatments to be
given to traders depending on the level of risk they pose to revenue loss or
compliance (World Customs Journal 2011).
The Malawi Revenue Authority has also identified benefits of implementing
ASYCUDA World. For instance ASYCUDA has a valuation database thereby
allowing for integration of valuation control, it has numerous accounting and
statistical abilities, single window platform which enables it to inter operate with
external organisations, an integrated risk management system, reduced cost as a result
of faster clearance times, increased revenue, streamlined procedures, system
flexibility and enables one to enquire on the status of transactions online.
Kamajugo (2014) also identifies benefits of ASYCUDA World as follows:
i. Faster clearance time from five to less than two days due to online submission and
paper declaration processing which will result in an increase in voluntary compliance.
34
ii. The system is web based and allows traders to submit their declarations and
documents using the internet anywhere in the world and improve transparency as
clients are able to view their transactions and status thereof in the system.
iii. The system allows for greater flexibility and quicker responses to business needs
through local modifications that can be made to the system.
iv. The system is ecofriendly as it allows for paperless declaration processing thereby
reducing paper usage by 80% in some stations which results in reduced costs and
greater efficiency.
v. The system is also able to provide a single window platform by interacting with other
IT system thereby allowing customs administrations to interface with other
government agencies and in the region thereby allowing for faster decision making.
It is the researcher’s considered view that customs administrations still have a long way to
go before they fully reap the benefits of ASYCUDA. Like any other IT intervention,
ASYCUDA must be effectively implemented and integrated with the organisations
existing capabilities. The sentiments echoed by Laudon and Laudon (2012) IT can
provide firms with strategic flexibility to enable them to realign businesses to changes in
the environment and to respond to opportunities holds water when one looks at the
benefits that can be reaped by the proper and effective implementation of ASYCUDA.
Indeed ASYCUDA has helped to transform customs administration and has helped to
bring about operational efficiency, transparency reduced costs, improved decision making
and productivity which are in line with the normal benefits that are derived from using IT
(O’brien and Marakas 2011).
2.10 FACTORS WHICH IMPEDE THE EFFECTIVENESS OF ASYCUDA
It is the researcher’s considered view that there is a gap in literature with regard the
challenges customs administrations face in implementing ASYCUDA. There is
agreement in literature on the profound benefits of ASYCUDA which could give one
have the impression that the system is flawless which in practice can hardly be the
case. Inspite of the formidable benefits of ASYCUDA challenges are faced which
may not necessarily be attributed to the configuration of the system itself but in the
35
practical implementation of the system. Most customs department have identified
challenges which they face which have mainly been attributed to the following:
2.10.1 CONNECTIVITY CHALLENGES
Connectivity enables a device to digitally transfer diagnostic data or to communicate
with a number of systems through the web or email and is usually used for various
purposes the most common being to access the internet (http://intel.welchallyn.com).
Revenue administrations face a lot of connectivity challenges due to various reasons.
The most common connectivity challenge is failure to secure appropriate bandwidth
from service providers to enable full utilisation of the system (www.dominica.gov).
The Ugandan Revenue Authority also cites ASYCUDA’s reliance on the internet as a
challenge as the system is affected by network intermittence. Nepal Revenue
Authority also faced connectivity challenges in implementing ASYCUDA due to
missing network connections which resulted in customs computers not being
connected to each other. There was therefore inadequate support for ASYCUDA in
Nepal as the system was introduced as a once off computerization exercise instead of
a complete modernisation programme. Papua New Guinea Customs Services has also
identified some challenges that have been encountered which include users failing to
be connected to the system which usually occurs at the time of logging in which is
caused by new users being blocked out due to a lot of dead processes running in the
system. Further, connections are also aborted due to communication link drops
which usually occurs with dial up connections.
2.10.2 SYSTEMS CHALLENGES
Revenue administrations have encountered a number of systems challenges in
implementing ASYCUDA. The Zambian Revenue Authority for example complained
that ASYCUDA++ does not transmit transit declarations automatically to some ports
in some instances. There has also been systems failure to acquit declarations
electronically at both entry and exit ports. This results in delays in customs clearance
with non-reimbursement of agents bonds and this also causes challenges in
monitoring transit goods as there will be discrepancies in the system with what is on
the ground. Another challenge that has been encountered is that the configuration of
36
the system causes it to have long processing time. An example of this which has been
given is that the system does not automatically allocate declarations to examining
officers upon registration and that declarations cannot be printed upon assessment.
According to Saint Lucia Customs Department there are technical challenges in
implementing warehousing and clearance modules due to differences with standard
practices.
According to Mwangwala, the Ugandan Revenue Authority previously used
ASYCUDA ++ which had a number of challenges which included its inability
navigate from one module to another without logging out of a module resulting in
time wastage. Further, ASYCUDA++ failed to adapt to the ever changing business
environment, such as technological changes. For instance ASYCUDA ++ uses
Windows XP and cannot be used on new versions of Windows like Windows 7 and
Windows 10. The system also does not provide for password changes thus causing
security challenges. Further, it is difficult to make changes to the system due to the
fact that the system has a complex source code and officials have to contact external
experts. Uganda also experienced systems failure were the system went down and
could not be restored for one week (Kamajugo 2014).
Another challenge with previous versions until the introduction of ASYCUDA World
is that they operate on a closed system and prevents customs authorities from
developing efficient risk management applications (World Customs Journal 2011).
2.10.3 POWER OUTAGES
Despite the implementation of ASYCUDA, the systems effectiveness is hampered by
lack of reliable electricity and communication thus resulting in manual clearance
processing thereby resulting in delays and rent-seeking behaviour by traders and
officials (UNCTAD Secretariat Review of Maritime Transport 2010).
2.10.4 INADEQUATE INFRASTRUCTURE
According to the Zambian Revenue Authority one of the challenges that is being
faced in implementing ASYCUDA is inadequate ICT equipment especially on the
37
part of clearing agents resulting in them sharing computers and printers and using
computer bureaus. For example, it has been reported `that out of 200 customs
clearing agents registered to operate in Chirundu only 16 are remotely connected to
ASYCUDA. This obviously has a negative impact on modernisation initiatives if
traders cannot fully benefit from the implementation of the system due to inadequate
resources on their part. Uganda Revenue Authority has also supported this by stating
that one of the challenges faced is that traders often have inadequate infrastructure
and lower models of IT hardware thus hampering the effective utilisation of
ASYCUDA.
2.10.5 Challenges with Clearing Agents
The Zambian Revenue Authority has also attributed challenges it faces to clearing
agents who have bureaucratic procedures (Nkoma n.d). For instance some agents are
required to obtain authority from their head offices before submission of declarations
to customs thereby causing delays in the clearance process. It has also been noted
with concern that some importers and or clearing agents delay to settle their
assessments thus resulting in goods being placed under embargo causing delays in
clearance of goods and causing trucks to be stranded at the border at the borders and
adversely affecting trade. The Zambian Revenue Authority further asserts that despite
the ASYCUDA inefficiencies clearing agents often have insufficient customs bonds
due to the high valued machinery, vehicles and other goods they have to move in
bond (Nkoma n.d). This results in goods not been cleared at the rate expected and
agents holding on to declarations until they have sufficient bond amount.
2.10.6 LACK OF SKILLS
Lack of competence of clearing agents has also been cited as a challenge which
causes unnecessary queries for customs officials who are already heavily burdened
with a lot work load. Further, this has led to clearing agents lagging behind in the
modernisation initiatives that are being undertaken by customs departments (Nkoma
n.d). According to the World Tax Journal most clearing agents have limited
knowledge and skills to use IT efficiently and it has been challenging for them to
comply with the requirement to exchange electronic information with customs. Lack
38
of sufficient knowledge of trade regulation is another challenge that customs
administrations face. Customs and traders face challenges in applying trade rules for
instance rules of origin or certificates of origin despite the implementation of
ASYCUDA (Nkoma n.d).
It is the researcher’s considered view that the ASYCUDA as IT intervention cannot
be evaluated in isolation of the other challenges that IT has brought about. Thus
ASYCUDA is still susceptible to the ordinary challenges that IT face and to this end
challenges such as security risks, connectivity challenges, systems failure, lack of
skills (The Global Information technology Report 2012) still cut across IT used in
customs administrations.
2.11 COMPARATIVE ANALYSIS
2.11.1 AFGHANISTAN
According to the Afghanistan Customs Department automation is an integral element
of customs reform and trade facilitation. Afghanistan Customs Department has also
found that automation helps to reduce corruption by reducing the level of face to face
interaction between customs officials and clients and helps to expedite processing of
customs documents such as bills of entry and declarations thereby saving traders
valuable time in the import and export process. ASYCUDA has allowed for the
introduction of a new declaration process which has helped to reduce the clearance
process by reducing the number of customs clearance declarations which used to be
five and reduced the number of clearance steps and signatures from fourteen to three.
There is full automation and electronic clearance process for the whole customs
process. Payment of duty is made through the Afghanistan National Bank and
confirmed electronically through the ASYCUDA system. ASYCUDA also allows
customs brokers to make prepayments. ASYCUDA also allows for the automatic
replication of updated reference data such as tariffs from the central server to local
systems which allows for the law to be applied consistently and in an effective
manner. There is also an automatic selection and assignment of customs inspectors for
physical inspection of goods by ASYCUDA which is an effective anti-corruption
39
measure. ASYCUDA automatically consolidates all customs declarations and is used
to produce accurate and timely statistics and trade data for economic analysis. The
Afghanistan Customs Department has also attributed enhanced revenue collection and
compliance to ASYCUDA.
However despite the implementation of ASYCUDA, the systems effectiveness is
hampered by lack of reliable electricity and communication thus resulting in manual
clearance processing thereby resulting in delays and rent-seeking behaviour by traders
and officials (UNCTAD Secretariat Review of Maritime Transport 2010). The
introduction of ASYCUDA has resulted in reduced customs clearance steps from
fourteen to two, customs documents from ten to two, clearance time from four
hundred and twenty eight minutes to approximately ninety minutes and has seen an
increase in trade volumes by three hundred percent and customs revenue by seven
hundred percent (UNAMA press release 2010 and Afghanistan’s customs
department).
2.11.2 NEPAL
ASYCUDA was introduced in Nepal in 1996 and is operational at nine customs
points and seven border posts. However, the ASYCUDA was only partly used for
processing, payment and goods declaration which is only a portion of its capabilities.
Further, there are missing network connections resulting in the customs computers not
being linked to each other. There was therefore inadequate support for ASYCUDA in
Nepal as the system was introduced as a once off computerization exercise instead of
a complete modernisation programme. The benefits of ASYCUDA have therefore
been minimal (Rakkarnikar 2006 cited in UNCTAD Secretariat Review of Maritime
Transport 2010).
2.11.3 NIGERIA
According to the Nigerian Customs Service (2012) the basic design of ASYCUDA++
is based on independence, flexibility and an open environment. The system allows
for customs administrations to configure it to its own specific needs which is one of
its major advantages. ASYCUDA’s capabilities have been said to be commendable
40
as its payment functions can incorporate prepayments and credits, can deal with
suspense and temporary procedures, risk assessment and selectivity and has the ability
to prevent goods from being removed until all payments have been met and all
requirements fulfilled (Nigeria Customs Services 2012). ASYCUDA++ has been
further commended for being able to give help to clients online and generate statics
and management information.
2.11.4 IRAN
ASYCUDA World has been implemented in Iran and by 2010 had been installed in
fifteen offices. The system has been commended for providing fast, transparent,
modern, computerized systems in customs data processing for the benefit of the
trading community. Further, ASYCUDA World has benefited Iran by preventing
tempering and forgery of customs documents, has enhanced control and monitoring of
transit goods, harmonized communication with other countries and it to access
international best practices. (Iran, Country Programme Performance Summary, 2005-
2011).
2.11.5 SAINT LUCIA (the following information was obtained from Leonard 2006)
Saint Lucia Customs and Excise Department implemented ASYCUDA version 2.7 in
1993 which enabled management of accounts, declaration process, warehousing,
statistics and temporary admissions. However, as trade volumes increased the
department was unable to provide efficient and effective service delivery with the
average declaration processing time ranging from five to seven days. The department
was further constrained by limited resources and was processing and examining 100
percent of the declarations it received and was also experiencing a lot of fraud through
undervaluation, incorrect declarations and illicit trading activities.
The department eventually migrated to ASYCUDA ++ in order to improve the
economy through the provision of efficient services and effective border security.
The benefits of implementing ASYCUDA ++ were reduced clearance time with green
41
lane clearance and processing averaging around twenty minutes. There has also been
increased revenue collection, simplification of procedures, greater transparency,
improved capacity building through training of staff and clearing agents and improved
trade statistics. The implementation of ASYCUDA has resulted in the use of risk
management techniques, a single administrative document, use of electronic manifests
and electronic data interface with direct trader input which minimizes visits to the
customs offices.Saint Lucia has also identified the following challenges encountered
in the implementation of ASYCUDA, that is limited resources to train officials and
various stakeholders, resistance to change by internal and external stakeholders,
delays in implementing structural change at various offices and transit sheds, lack of
budgetary support, slow buy in by some stakeholders, disruptions in internet services
and technical challenges in implementing warehousing and clearance modules due to
differences with standard practices.
42
2.10.1 PHILIPPINES BUREAU OF CUSTOMS
Table 2.2: Processes at Philippines Bureau of Customs before and after
implementation of ASYCUDA
Prior to the implementation of ASYCUDA at Philippine
Bureau of Customs
After implementation of
ASYCUDA
Number of signatures required 79 5
Time taken to release cargo 6 to 7 days Green lane- 4 to 6 hours
Yellow and red lane- 48
hours
Types of shipments examined All Green lane- 70% no
examination
Red lane- 15% physical
examination
Yellow lane- 15% document
examination
Type of supporting documentation
required
Payment orders Proof of electronic
payments made to banks are
transmitted to the Bureau
electronically
Areas of examination Anywhere in the
port
Designated examination
areas
Accountable forms required Many forms Single administrative
required document (SAD)
Inward manifest 13 3 copies of electronic
documents submitted
Bureau
Source: Adapted from the International Journal “Information Technologies and
Knowledge” Vol.6, Number 4, 2012
Table 2.2 above shows the benefits that the Philippines Bureau of Customs has
experienced since the implementation of ASYCUDA.
2.12 CONCEPTUAL FRAMEWORK
A conceptual framework is defined by Miles and Huberman (1994) as a written
or visual presentation that “explains either graphically, or in narrative form, the
main things to be studied
presumed relationship among them” (p18). The figure below depicts the
researchers own construction of the conceptual framework from the literature
reviewed which shows the variables that are essential
implementation of ASYCUDA.
Figure 2.1 Conceptual framework
Source: the researcher’s own construction from the literature review
CONCEPTUAL FRAMEWORK
A conceptual framework is defined by Miles and Huberman (1994) as a written
or visual presentation that “explains either graphically, or in narrative form, the
died – the key factors, concepts or variables-
presumed relationship among them” (p18). The figure below depicts the
researchers own construction of the conceptual framework from the literature
reviewed which shows the variables that are essential for the effective
implementation of ASYCUDA.
Figure 2.1 Conceptual framework
Source: the researcher’s own construction from the literature review
43
A conceptual framework is defined by Miles and Huberman (1994) as a written
or visual presentation that “explains either graphically, or in narrative form, the
- and the
presumed relationship among them” (p18). The figure below depicts the
researchers own construction of the conceptual framework from the literature
for the effective
44
2.13 LITERATURE SYNTHESIS
The customs model that has been adopted by most customs administrations is the RKC as
posited by Zake (2011). The RKC has set the platform for the use of IT in customs
administration including automation, risk management, electronic funds transfer amongst
other things.
Zake (2011) posits that customs administrations operate in a complex and dynamic
environment that deals with for example, an array of traders, rules that determine origin
of goods, classification of goods, tariffs and valuation differences. Changes in the
operating environment of customs administration also pose challenges and adds credence
to the fact that they need to modernize and adjust processes (The World Bank 2005).
Customs administration challenges include revenue fraud, smuggling, proliferation of
trade agreements both regional and bilateral which make it more complex to administer
border controls and formalities, security issues such as terrorist attacks and organized
crimes and continuously dealing with sophisticated and demanding clients thus placing a
heavy burden on customs administrations (The World Bank 2005 and the OECD 2009).
Automation of customs procedures is an integral part of customs reform and
modernisation and plays a vital role in trade facilitation (World Customs Journal 2009).
According to the World Customs Journal (2009) the primary benefits of automation that
have been identified by UNCTAD, OECD and WCO are reduced, increased revenue
collection, in built controls and uniform application of the law, faster clearance
procedures, streamlining of customs procedures, reduced physical inspection of goods,
improved management information and electronic filing of declarations using direct
trader input through the internet or electronic data interchange.
Literature has also shown that automation has its challenges and in particular it has been
established that the effectiveness of ASYCUDA is impeded by challenges due to
connectivity issues, power outages, systems failure, corruption and lack of skills and
training.
Literature has also shown that the use of ASYCUDA has helped to curb customs
administrative challenges by streamlining cumbersome procedures, increasing speed of
45
goods clearance, increasing revenue collection, uniform application of the law, risk
management and reducing costs amongst other things.
According to Chisembwere (2010), effective customs modernisation entails a complete
streamlining of procedures, processes, formalities and documents handled by customs.
Further, there is also need for improved regulatory and legal framework to support the
effective implementation of modernisation initiatives such as ASYCUDA. There must
also be optimum application of IT solutions.
According to the Worlds Customs Journal, the introduction of the single window concept
will also go a long way in alleviating some of the administrative bottlenecks that customs
administrations face. A single window concept will enable traders to submit all required
information at once to a single assigned authority to allow enhanced trade facilitation and
faster clearance of goods.
Reza (1996) has also recommended the continuous training of staff on the role of customs
and functions of ASYCUDA, establishment of a reliable system for exchanging
information between customs and other institutions in order to facilitate customs
operations and reform customs procedures and rules.
It is also essential for customs legislation to provide for the changes that are resulting
from modernisation initiatives such as encompassing the use of electronic declarations
amongst other things in order to strengthen and improve compliance. Papua Guinea has
gone a step further by amending its Customs Act to deal with cybercrime making it an
offense to divulge information from the system, passwords, to tamper, manipulate or
destroy any data in the system (Papua Guinea Information Customs Sheet, 2010
legislation).
2.14 CHAPTER SUMMARY
This chapter provides a critical review of the literature on the study of the effectiveness of
ASYCUDA as information technology intervention in curbing tax administrative
challenges. The literature review shows that ASYCUDA has to a large extent benefited
customs administrations in curbing administrative challenges such as cumbersome
bureaucratic clearance procedure, corruption, fraud, valuation challenges, failure to
46
optimise revenue collections amongst other challenges. It also emerged from the
literature review that ASYCUDA has helped to streamline customs procedures, reduce
costs to clients and revenue administrations, increase revenue flows, improve trade
statistics, reduce corruption, improve risk management and enable uniform application of
the law. The challenges that are faced by revenue authorities in implementing
ASYCUDA were also identified and these include systems challenges, connectivity
challenges, power outages, inadequate infrastructure, challenges with clearing agents and
lack of skills. Country experiences from other countries was also used for comparative
purposes. It has however, also emerged from the literature review that the information
technology is not an end in itself to curb custom administrative challenges that are faced
by revenue authorities and that information technology which is used in isolation of other
processes and resources will not enable an organisation to enhance its capabilities or
value creation opportunities.
47
CHAPTER 3
RESEARCH METHODOLOGY
3.0 INTRODUCTION
Research methodology is defined as a systematic way to solve a research problem
(Galliers 1991). This chapter informs the reader about what the researcher did,
how the researcher carried out the research and why the research was carried out
in the manner it was. The chapter gives a recap of the research questions, looks at
research philosophies, research design, research strategy, population and sampling
techniques, research instruments, sources of data, pilot study, data analysis,
reliability and validity, ethical considerations and research limitations.
3.1 RECAP OF RESEARCH QUESTIONS
The study sought to answer the following research questions:
Main Research Question
How effective is automation as an IT intervention in curbing customs
administrative challenges faced by ZIMRA.
Research Sub Questions
1. What are the customs administrative challenges faced by ZIMRA?
2. In which areas has automation succeeded as an IT intervention in curbing
customs administrative challenges in ZIMRA?
3. In which areas has automation failed as an IT intervention in curbing customs
administrative challenges in ZIMRA?
4. What challenges impede the effectiveness of automated systems?
5. What recommendations can be made following findings from the study?
48
3.2 RESEARCH PHILOSOPHIES
Research philosophies encompass assumptions about the way one perceives the
world and determine the methods and strategies that a researcher undertakes
(Saunders, Lewis and Thornhill 2009). Easterbay-Smith, Thorpe and Lowe (1991)
define research philosophy as the conviction about how information should be
collated, examined and used. The philosophy that one uses is influenced by
practical considerations the main being the researcher’s perception of the
relationship between knowledge and the process by which it is developed
(Saunders et al 2009).
There are three main philosophical approaches which are positivism, realism and
interpretivism. Positivists assert that there is a single reality or truth that can be
discovered and measured objectively using standardised instruments by distancing
oneself from data (Massingham, Massingham and Diment 2012). Realists claim
that reality is independent of the mind and believe that there is a scientific
approach to the development of knowledge (Saunders et al). Interpretivism on the
other hand is cognisant of the importance of distinguishing between the various
roles of humans as social actors and originates from a long standing tradition of
phenomenology which is defined as the way humans make sense of the world
(Saunders et al 2009). According to Massingham et al 2012 “interpretivists
immerse themselves in their data and believe that reality is invented or created
through the interaction between the data and the researcher” (p 67).
The research philosophy that was adopted in this study is interpretivism to enable
the researcher to gain insights into the complex environment that ZIMRA operates
in and to fully understand the different roles that individuals play in this complex
system and how they interpret their different roles. This enabled the researcher to
enter the social world of the subjects and understand the world from their point of
view (Saunders et al 2009). The justification for the use of interpretivism is that
the research desired to focus on the details of the case study and discover the
reality behind the use of automated systems and the subjective meanings which
motivated the actions of officers in the use of the automated systems and in
49
assessing the effectiveness of ASYCUDA in curbing customs administrative
challenges.
The researcher also used an inductive research approach by collecting data and
developing a theory as a result of data analysis in order to gain an understanding
of the meanings that the respondents attach to case understudy and a close
appreciation of the research context (Saunders et al 2009). Inductive research also
allowed the researcher to use a more flexible structure to make changes on
research emphasis as the research progressed (Saunders et al 2009). The research
was also exploratory in nature in that it sought to find out what was happening
with the implementation of ASYCUDA in ZIMRA and how it was effective in
curbing customs administrative challenges and why it was ineffective in curbing
some administrative challenges.
3.3 RESEARCH DESIGN
The purpose of a research design is for the researcher to acquire evidence that will
enable him or her to address the research questions (Saunders et al 2000). The
researcher used a case study of ZIMRA to gather evidence that would be used to
answer the research questions and the use of this approach is supported by Stake
(1995) cited inCreswell (2003) and Hussey and Hussey (1997). The research
population comprised of ZIMRA customs officials and clearing agents due to the
fact that these are the people who use the automated system of ASYCUDA for
customs processes and are knowledgeable about the systems operations and would
thus be able to objectively share their experiences utilising the system. The
researcher carried semi-structured interviews using which assisted the researcher
to probe for more detailed and informative responses. The semi-structured
interviewees were based on questions which were formulated to cover the studies
objectives. Secondary data such as academic journals, reports, publications and
institutional documents were also examined.
50
3.4 RESEARCH STRATEGY
The research strategy is influenced by research objectives and questions, the
availability of time and resources, philosophical assumptions and existing
knowledge (Saunders et al 2009). The researcher used a case study to gather
evidence that would be used to answer the research question and the use of this
approach is supported by Stake (1995) cited inCreswell (2003) and Hussey and
Hussey (1997). According to Stake (1995) cited in Creswell (2003) a case study
enables the researcher to discover an activity, event, program, process or one or
more individuals. The justification for using a case study is that it enabled the
researcher to explore in greater detail how effective automation is in curbing
customs administrative challenges in ZIMRA due to the fact that ZIMRA has used
ASYCUDA to automate its processes and hence employees from ZIMRA and its
customers would be able to provide their views of the system and its effectiveness.
Further, the case study assisted the researcher to ascertain why automation has
failed if at all in curbing customs administrative challenges in some cases. This is
supported by Yin (1994) who states that a case study is useful when “a how or why
question is being asked about contemporary set of events over which the
investigator has little or no control (p 9). A case study was also preferred due to
the fact that it assists in studying unique organisations (Robson 2003) within their
context such as the one under study.
3.5 POPULATION AND SAMPLING TECHNIQUES
3.5.1 POPULATION
A population is a group of people or items under study (Collins and Hussey
2009:210). Saunders et al (2009) on the other hand define population as “the
full set of cases from which a sample is taken”. The population for this study
comprised of ZIMRA customs officials and customs clearing agents.
51
3.5.2 SAMPLING TECHNIQUES
A subset of the population is selected for a given study and the characteristics
of the population and research objectives determine which people are selected
and their numbers (Family Health International n.d.). The most common
sampling methods used in qualitative studies are quota sampling, purposive
sampling and snowball sampling (Saunders et al. 2009). The sampling
method which was used in this study was purposive sampling where
participants are selected using a criteria which is relevant to the research
question (Family Health International n.d.). Purposive sampling is used when
working with small samples such as case studies (Neuman 2005) and enables
the researcher to use personal judgment during the selection process in light of
what enables the researcher to address research questions and achieve the
objectives of the study (Saunders et al. 2009). Purposive sampling was used
by the researcher due to the fact that the topic under study is specialised
therefore meticulous selection of participants who had experience of over ten
years working in ZIMRA was sought. Participants with in-depth knowledge in
the subject area and requisite expertise in utilising ASYCUDA were also
sought. In this regard, ten managers were found to be suitable interviewees as
opposed to officers as they fitted the criteria that was sought for and could
answer authoritatively on the subject area as opposed to officers who would
not feel comfortable disclosing certain information without their managers’
consent. Seven clearing agents were also found to be suitable interviewees as
they deal directly with ZIMRA on behalf of their clients and are well versed
with how ASYCUDA works as they use it on a day to day basis.
3.6 RESEARCH INSTRUMENTS
Research instruments are tools to obtain information that is appropriate to a
research project and no research instrument is more superior to the other and each
has its strengths and weaknesses (Wilkinson and Birmingham 2003). The
researcher used primary and secondary methods of data collection which are
discussed below.
52
3.7 SOURCES OF DATA
3.7.1 PRIMARY DATA COLLECTION METHODS
Primary data is data that is collected for the first time from an original source such
as interviews, surveys, experiments and focus groups (Collis and Hussey 2009).
The researcher collected primary data through the use of semi-structured
interviews.
Table 3.1 below shows the category of respondents, research instruments that
were used and the method of distribution that was used.
Table 3.1 Research Instruments and distribution methods
Category and number
of respondents
Research instrument
administered
Channels of
communication
Managers (10) Semi-structured interviews Face to face and telephone
interviews
Clearing agents (7) Semi-structured interviews Face to face and telephone
interviews
3.7.2 INTERVIEWS
Kahn and Cannell (1957) cited in Saunders et al (2009) define an interview as a
focused dialogue between two or more people. Interviews may be structured,
semi-structured or unstructured and either forms of interviews may be used
together (Saunders et al 2009).
The researcher used semi-structured interviews and developed a list of questions
and themes in line with the research questions and objectives. Semi-structured
interviews were preferred due to the fact that they could be used to explore and
explain themes that emerged from prior interviews (Tashakkori and Teddlie
53
1998). Semi-structured interviews enabled comprehensive interviews with
selected respondents to be done to ascertain their perceptions on the study at hand.
Telephone interviews were also conducted for five respondents who were out of
Harare such as Beitbridge, Plumtree and Nyamapanda. This method was
employed due to the fact that it was cheaper and a faster means to collect data.
The researcher’s use of this method of data collection was also motivated by the
fact that it is useful in providing more detailed information in a conducive
environment (Boyce and Neale 2006). This method also had the advantage of
allowing the researcher to probe interviewees and to acquire more meaningful and
informative responses from the interviewee’s experiences. The interviews were
also recorded for interviewees who were willing to be recorded and hand written
notes were also taken down during the interviews. Recordings that were made
were transcribed in verbatim.
A total of 17 respondents were targeted for the interviews, 10 being ZIMRA
employees and 7 being clearing agents. This is due to the fact that the sample for
qualitative research does not have to big. The clearing agents were accessed
through a database from the Shipping and Forwarding Agents Association of
Zimbabwe (SFAAZ) and clearing agents who have relatively high volumes of
business were targeted in order to obtain more valid and credible responses. Semi-
structured interviews were carried out on 10 managers in the customs division to
gain a clearer understanding of the subjects due to their experience and knowledge
in the area under study. The researcher was also able to use data from the
interviews to extrapolate more meaningful information from subsequent
interviewees based on the themes that were prominent in the findings and this
enabled the researcher to corroborate findings and detect areas of discrepancies.
3.7.3 SECONDARY DATA
Collis and Hussey (2009) define secondary data as data which is collected from
existing sources such as internal records, publications and databases. The
researcher obtained data from secondary sources such as academic journals,
publications, articles on trade facilitation and customs automation, newspaper
54
articles, reports and institutional documents. This method was adopted due to the
fact that secondary data is readily accessible, inexpensive to collect, provides
corroborative material and a reference point to enhance the credibility and
reliability of the study.
3.8 PILOT STUDY
Pilot study is a small study which is carried out in order to assess the feasibility of
the study, to ascertain appropriateness of the method to be used, the sample size,
time, cost and to improve on design of the study before a full scale research is
carried out (Hulley 2007). Baker (1994) states that a pilot study is pre-test of the
research instrument to ascertain if the instrument is clear. A pilot study was done
with three representatives from each category. The justification of using a pilot
study was that it enabled the researcher to make necessary amendments to the
research instruments in order to receive more accurate responses and to realign
questions more effectively to the research objectives. Purposive sampling was
also used to come up with the sample for the pilot study in order to verify if this
would be an appropriate sampling method to use in the main study. Further, the
respondents used in the pilot study were excluded from the final research as a
precaution against any biased responses or compromises.
3.9 DATA ANALYSIS
Data analysis is a method of reducing data to make sense of it and to interpret it
(LeCompte and Schensul 1999 cited by Kawulich (nd). The researcher carried out
data analysis using steps that were identified by (Patton 1987). In particular, the
researcher organised the data and reduced it through summarisation by coding and
categorising the data. The researcher also identified and linked themes and
patterns in the data and offered well-reasoned conclusions through interpretation
of the findings. Further, data analysis was done simultaneously with data
collection due to the huge amount of data that had to be collected. This also
enabled the researcher to modify questions from potential and useful data that was
obtained during other interviews (Merriam 1998). The focus of qualitative data
55
analysis was not to generalise findings to a large population but to generalise ideas
so that they can be applied in many contexts (Saunders et al 2009).
3.10 RELIABILITY AND VALIDITY
According to Lincoln and Guba (1985) trustworthiness of qualitative data is
evidenced by transferability, dependability, conformability and credibility. These
shall be used to confirm the reliability and validity of the researcher’s findings.
Transferability means there is evidence that supports the generalisation of findings
to other contexts across different groups and situations (http://www.sagepub.com).
Dependability means that there is evidence to show that similar findings would be
obtained if the study were repeated and is enhanced by triangulation, rich
documentation, and audit trials amongst other things (http://www.sagepub.com).
Conformability refers to the researcher’s objectivity and lack of bias and is
enhanced by consistency with quantitative findings which yield similar results
(http://www.sagepub.com). Credibility refers to the authenticity of findings and is
enhanced by confirming evaluations of conclusions with research participants,
control of unwanted influences, convergence of multiple sources of evidence and
theoretical fit (http://www.sagepub.com).
3.11 ETHICAL CONSIDERATIONS
Ethics are values that influence or direct moral choices about our behaviour and
relations with others (Cooper and Schindler 2008). There are various ethical
issues that one needs to take into consideration which include voluntary
participation, consent of participants, privacy issues, confidentiality and reaction
of participants (Saunders et al 2009).
The researcher was guided by the aforementioned ethical considerations through
the research. In particular the researcher started by requesting for permission to
carry out the research in ZIMRA which permission was granted (See Appendix 1).
The researcher also sought the consent of respondents to interview and record
them and disclosed all information about the study, its purpose and intended use to
56
avoid any forms of deception. Respondents were also informed about the
voluntary nature of their participation and of their right to withdraw partially or
completely from the process. Respondents identities were kept confidential and
emails that were sent did not show the names of the recipients of the emails so
respondents did not know who the other selected respondents were. Responses
from the respondents were kept locked up in a safe place and the researcher is the
only person who had access to the same. Respondents’ privacy was also observed
and respondents were only contacted during normal business hours. The
researcher was also cognisant of the respondents’ reactions during the interview
process in order not to cause any discomfort, stress or embarrassment.
3.12 RESEARCH LIMITATIONS
Research limitations are certain features or aspects of the design or methodology
that influenced or had an impact on the interpretation of one’s research findings.
The following limitations were encountered due to the qualitative nature of the
study.
Some respondents refused to be tape recorded during the interview. This
limitation was however countered by the fact that the researcher took down
handwritten notes which resulted in a lengthy process in order to capture the
respondents’ exact words.
There was limited prior research in existence on the topic understudy especially in
the form of scholarly work which gave a critical view of the ineffectiveness of
automation in customs administration to help lay a more solid foundation for a
balanced critique of the problem that was being investigated. However this
challenge was overcome by the fact that information from other revenue
authorities and donor organisations like WCO, UNCTAD, World Bank was
available and their experiences helped to compliment other limited studies that
were done and added credence to the study. This limitation justifies the gap in
literature that exits and hence the need for the study.
57
There is also a limitation with the use of self-reported data that is collected in
qualitative studies in that it cannot be independently verified as the researcher has
to take information from respondents’ interviews at face value (University of
California). Further, self-reported data can also contain biases. However, this
challenge was overcome by the fact that the researcher tried to remain objective so
that the study did not reflect the researcher’s personal views and opinions during
the study and looked for inconsistencies of data in comparison with other sources
in order to maintain and promote validity of findings.
Another research limitation encountered in this study is that qualitative research
cannot be generalised to the entire population (Saunders et al 2009). This is
however limited by the fact the intention of qualitative research is to generalise
ideas so that they can be applied in many contexts and not to necessarily
generalise findings to the general population (Saunders et al 2009).
The researcher also used a case study which has a limitation that causal
conclusions cannot be made as one cannot rule out alternative explanations..
The researcher also encountered challenges with accessing information from
within the organisation. This was either due to lack of cooperation by certain
individuals or due to the sensitivity of the information which had to be kept
confidential. The researcher overcame this limitation by accessing the
information directly from managers and by using other sources of information that
are within the public domain.
3.13 CHAPTER SUMMARY
` This chapter covered the research methodology used to evaluate the effectiveness
of automation in curbing customs administrative challenges in ZIMRA. The
research was qualitative and an interpretivism approach was adopted. A case
study of ZIMRA was adopted as the research strategy. Primary data collection
was done using semi-structured interviews whilst secondary data was used in the
58
form of reports, publications, academic journals amongst other things. A pilot
study was also carried out. A number of limitations were encountered due to the
qualitative nature of the study but these were not material to the study and did not
affect the research findings due to various techniques that were used to counter the
limitations.
59
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.0 INTRODUCTION
The purpose of this chapter is to present data findings, data analysis and to give an
interpretation of the research findings. The researcher used the qualitative methods to
gather data through the use of semi-structured interviews on selected ZIMRA
employees and clearing agents. Qualitative analysis of the findings was done using
data reduction, coding, categorisation and through identification of themes and
common patterns. Findings are also presented through the use of tables. The findings
were also compared and contrasted with literature in chapter two.
4.1 KEY RESPONDENTS
The interviewees comprised of ten ZIMRA managers in the Customs and Excise
division and seven clearing agents making a total of seventeen respondents.
4.2 ZIMRA EMPLOYEES: FINDINGS FROM STUDIES OBJECTIVES
4.2.1 DEMOGRAPHICS
Table 4.1 in Appendix 2 shows the demographics of ZIMRA employees. The
majority of the interviewees from ZIMRA are between the ages of 40-49. In
particular, six out of ten interviewees are between the ages 40-49 whilst the
remaining four are above 50 years. The age of the interviewees shows that they are
mature and have vast working experience and this is supported by the fact that all the
60
interviewees have been employed by ZIMRA for over 11 years. However, ZIMRA
has been in existence for fourteen years since its establishment in January 2001.
This means that the respondents with over 15 years working experience in ZIMRA
were employed by the Department of Customs and Taxes, ZIMRA’s predecessor. To
be precise the majority of the respondents have been employed by ZIMRA for over
15 years, that is, 60% of the respondents whilst 40% of the respondents have been
employed between 11-15 years. This vast working experience should help to
validate findings.
4.2.2 IDENTIFICATION OF CUSTOMS ADMINISTRATIVE
CHALLENGES
Table 4.2 in Appendix3 depicts the responses of ZIMRA employees on the customs
administrative challenges that are faced by ZIMRA. A total of ten challenges were
identified by the interviewees who all unanimously agreed on nine challenges that
are faced by ZIMRA. In particular, all the interviewees agreed that corruption was
one of the challenges faced by ZIMRA and needs to be addressed especially at
border posts where it is more conducive for officers to be corrupt by colluding with
clients to underpay duty or to smuggle goods whilst officers are given money for
their own personal benefits. One of the interviewees said, “Corruption is so rampant
in the Authority despite the fact that we have a zero tolerance to corruption which is
a cause for concern. This is especially so at border posts and it is very difficult to
prove that an officer is being corrupt since it is often difficult to get concrete
evidence to prove corruption”.
Smuggling was also identified as one of the prime customs administrative challenges
faced by ZIMRA whereby traders import or export goods into the country without
declaring and paying duty either through the border post or through porous points or
by under declaring or undervaluing goods. All the interviewees agreed that
smuggling is a challenge that is faced by ZIMRA. All the interviewees pointed out
61
that theft was also another challenge that was faced whereby officers can steal
money, goods or collude with clients to defraud the Authority.
Revenue fraud/leakage was also cited as a challenge by all interviewees. One of the
interviewees stated, “Revenue leakage is one of the major challenges we face due to
the fact that clients will by all means try to save every dollar they can and will
employ all means necessary not to pay duty by any illicit means they can such as
smuggling, bribing officers, using fake receipts to under declare goods amongst other
things”.
Cumbersome clearance procedures were also identified as a customs administrative
challenge by all the interviewees. Four interviewees stated that cumbersome
clearance procedures were due to a number of reasons which range from the number
of documents that need to be lodged for clearance purposes to the various
requirements that clients need to comply with from the multiple government
agencies that are present at ports of entry. One of the interviewees stated that “
Clearance procedures need to be streamlined in order to make the whole process less
time consuming and this can be achieved using the single window concept which
will be very beneficial to businesses, as you have heard that time is money”.
The interviewees also agreed that customs transit monitoring is a problem that is
faced by ZIMRA. One of the interviewees explained that goods in transit are goods
which move between countries before reaching their final destination and these
goods will not be subject to payment of customs duties and other taxes until they
reach their final destination and should thus not be consumed until they reach their
final destination. The challenge therefore lies is ensuring that goods in transit leave
the country and are not consumed locally”.
The majority of the interviewees being six out of ten were of the view that legislative
challenges were faced by ZIMRA. Several interviewees pointed out that challenges
62
are being faced due to the fragmented pieces of legislation that are in place due to the
huge numbers of amendments that are constantly been made to the Customs and
Excise Regulations which makes it difficult to keep track of changes in legislation.
Further challenges are being caused by increase in regional and bilateral trade
agreements as well.
Warehousing problems were also cited as a challenge faced by ZIMRA. One
interviewee stated that, “Warehousing problems are caused by large volumes of
goods that are kept in the warehouses which make it difficult to account and manage
each and every item in stock and to prevent goods from going missing.
Risk assessment is another challenge that all the interviewees identified. One
interview summed up the challenge as follows, “Risk assessment has always been a
challenge due to the fact it is supposed to help an officer to identify high risk goods
and pave way for the fast clearance of low risk goods but this is a challenge due the
nature of our operations. Specifying goods as low risk does not necessarily mean
that there are no goods which are subject to payment of duty due to the fact that one
is relying on representations made by clients which representations maybe false.
Therefore drawing a line between low and high risk goods is very difficult to do in
ZIMRA due to the fact that an officer will be found liable in the event that there are
goods liable to payment of duty as the procedures state that a 100% physical
inspection should be done”.
Discussion of findings
The research findings show that corruption is one of the major challenges
encountered by ZIMRA with all the interviewees identifying it as a challenge. This
finding on corruption has been supported by a number of scholars such as ITD
(2010), Seing (n.d.) and Hors (2001) who all identify corruption as a major customs
administrative challenge. All the interviewees stated that smuggling is a challenge
63
that is faced by ZIMRA. These finding therefore confirm that smuggling is a prime
customs administrative challenge which finding is supported by Keen (2003) who
points out that smuggling is a challenge that will continue and identifies other means
of smuggling apart from concealing goods as has been identified by the interviewees.
The findings also show that revenue fraud or leakage is a challenge that is faced by
ZIMRA as identified by all the interviewees. This finding is supported by Wulf et al.
(2005) who cites revenue fraud as a challenge which places an onerous burden on
customs administrations. The research that was carried out also shows that
cumbersome clearance procedures is a challenge that is faced by ZIMRA.
Legislative challenges is another challenge that emerged from the research. The
finding that legislative challenges are caused by the increase in trade agreements is
supported by Wulf et al. (2005) who posits that the proliferation of regional and
bilateral trade agreements make it more difficult to enforce border controls. The
finding on legislative challenges due to fragmented pieces of legislation is not
supported by the literature review and may in this context maybe regarded as a new
finding.
There are a number of challenges which were identified in the research which
however are not contained in the literature that was reviewed. In the same vein there
are a number of challenges that were identified in the literature review which were
not identified by the interviewees. In this regard it is the researcher’s considered
view that this goes to show that customs administrations face an array of challenges
which are often defined in the context and environment within which these customs
administrations operate. The fact that numerous challenges have been identified in
literature and that more new challenges continue to emerge shows that challenges
faced by customs administrations cannot be confined to a limited number of
challenges and shows the subjective nature of the challenges that are faced by
customs administrations. It also shows that there is no universal definition of the
challenges that are faced and that one challenge faced by Malawi Revenue Authority
for example may not be a challenge for the South African Revenue Authority and
vice versa. In this regard the research that was carried out shows that ZIMRA faces
64
transit monitoring challenges and warehousing challenges which were not identified
in the literature review. This may therefore be viewed as new findings which may be
added to the existing body of literature or that the challenges contained in the
literature review are not exhaustive due to the fact that these challenges are
subjective.
4.2.3 ASYCUDA FUNCTIONS/MODULES USED BY ZIMRA
The interviewees were asked to identify the ASYCUDA modules that are used in
ZIMRA. Their response are contained table 4.3 in Appendix 4. The interviewees
all identified the following modules which are electronic lodging of bills of
entry/declarations, electronic assessments and electronic payments. Risk
assessment selectivity and customs transit system were each identified by nine out
of the ten interviewees whilst warehouse system was identified by seven out of ten
interviewees. Three of the interviewees failed to identify the other three modules
possibly due to the fact that they do not utilise these modules.
4.2.4 AREAS ASYCUDA HAS HELPED TO CURB CUSTOMS ADMINISTRATIVE CHALLENGES
The interviewees were asked to identify areas where ASYCUDA has helped to
curb customs administrative challenges in ZIMRA and their responses are
contained in table 4.4 in Appendix 5. ASYCUDA has managed to reduce
corruption according to nine out of ten interviewees. The interviewees attributed
this to reduced interaction between officers and clients and also due to the fact that
ASYCUDA leaves an audit trail of who did what at each point in the system
thereby increasing transparency. One of the interviewees had this to say, “The
introduction of ASYCUDA has helped to reduce corruption as it has reduced
personal contact between officers and clients which is what normally creates a
rapport between them and results in over familiarisation and leads to rent seeking
behaviour”. However, one interviewee did not think that ASYCUDA curbed
corruption and had this to say, “In my opinion the use of ASYCUDA does not
stop or reduce corruption due to the fact that they will always be interaction
65
between officers and clients especially when goods are being physically examined
and in the event that a client would have under declared any goods for example,
there is always room for the officer and client to collude at this stage”.
The interviewees were asked whether ASYCUDA has been effective in curtailing
theft in ZIMRA. According to six out ten interviewees, ASYCUDA has managed
to curb theft due to the fact the system leaves an audit trail of what each officer
does in the system which allows for accountability and transparency and reduces
opportunity for committing fraud or theft. ASYCUDA has been effective in
curbing revenue leakages, cumbersome clearance procedures, risk assessment and
customs transit monitoring according to nine out of the ten interviewees. Only two
of the interviewees were of the opinion that ASYCUDA has been effective in
curbing legislative challenges whilst five out of the ten interviewees were of the
opinion that ASYCUDA has been effective in minimising warehousing
challenges.
Discussion of findings
The research findings show that ASYCUDA has managed to curb corruption as
indicated by the nine out of ten interviewees. This was attributed to factors like
audit trails in the system, greater transparency and reduced interactions between
officers and clients This position is supported by Hors (2001) who posits that
direct interaction with clients by customs officials increases the risk of corruption
whilst Seing (n.d.) asserts that ASYCUDA helps to reduce corruption due to
electronic processing of bills of entry thus reducing direct interaction between
officials and clients. This position is also supported by Crandall and Kidd (2010)
who postulate that the use of automated systems helps to reduce corruption and
allows for timely detection of corrupt behaviour. The World Customs Journal
(2009), further states that reduced corruption is one of the prime benefits of
automation due to increased transparency.
The research findings also reveal that ASYCUDA has been effective in reducing
theft by officers due to the fact the system leaves an audit trail of what each
officer does in the system which allows for accountability and transparency and
66
reduces opportunity for committing fraud or theft. This position is supported by
Simpson (2005) who asserts that automation of customs administrations helps to
ensure timely detections of any violations in the system. The World Customs
Journal (2009) also states that automation increases revenue flows due to in built
controls in the system and an example of this is the ability of the system to leave
audit trails. The research also shows that ASYCUDA has been effective in
curbing revenue leakages due to fraud and other illicit practices and this is
supported by the World Customs Journal (2011) which states that automation
allows for early detection of fraud.
The research also shows that cumbersome clearance procedures have been
minimised through the use of ASYCUDA. This position is supported by Farzaneh
et al. (2014) who assert that ASYCUDA helps to simplify customs procedures by
decreasing the number of declarations and attached documents. The research also
revealed that ASYCUDA has been effective in curtailing risk assessment
challenges, customs transit monitoring and warehousing challenges. ASYCUDA
has also been effective in minimising legislative challenges by enabling uniform
application of customs laws and this position is supported in the Worlds Customs
Journal (2009), Crandall and Kidd (2009) and by UNCTAD (n.d.), the designers
of the system.
4.2.5 AREAS ASYCUDA HAS FAILED TO CURB CUSTOMS ADMINISTRATIVE CHALLENGES
The interviewees were asked which areas ASYCUDA has failed to curb customs
administrative challenges and their responses are contained in table 4.5 in
Appendix 6. smuggling according to six out of the ten interviews who pointed out
that the use of ASYCUDA as an automated system used by ZIMRA in no way
deters or prevents smuggling. Only four out of the ten interviewees were of the
opinion that ASYCUDA has helped to reduce smuggling. The interviewees stated
that smuggling can take a number of forms which include concealment of goods,
undervaluing goods so that less duty is paid than what is actually due, failing to
declare goods amongst other things. Interviewees were probed further as to why
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they were of the view that automated systems like ASYCUDA did not prevent
smuggling. One of the interviewees said in relation to undervaluation of goods,
“ASYCUDA is a computer based system which only relies on information given
by clients in their bills of entry and there is no way to ascertain the truthfulness of
such information at this stage which can only be done in the event that goods are
subjected to physical inspection which is not always the case. Therefore clients
may still smuggle goods and get away with it”. Another interviewee stated,
“Automated systems such as ASYCUDA cannot detect that goods have been
concealed thus automation does not in any way prevent smuggling of goods.
Other interviewees pointed out smuggling of goods does not necessarily take
place at the borders only but can also take place at porous points which clients
take advantage of knowing that their chances of getting apprehended are quite
remorse.
The findings also show that eight out of the ten interviewees were of the opinion
that ASYCUDA does not curb challenges associated with classification of goods.
The interviewees in fact stated that ASYCUDA does not classify goods which is
something that is in fact done by officers due to the fact that the system cannot
classify goods but can only detect the tariffs which should be applied. Thereafter
it is the officers who in fact ascertain if the goods would have been classified
correctly for duty purposes.
Discussion of findings
The majority of the interviewees being six out of ten stated that automation does
not curb smuggling which is one of the major challenges that ZIMRA and other
customs administrations face. This finding is consistent with the position that is
enunciated by Seing (n.d.) who states that the use of ASYCUDA does not reduce
smuggling of goods. A minority of the interviewees being four out of ten were of
the opinion that ASYCUDA has helped to reduce smuggling. This finding though
it is not conclusive is supported by Yasui and Engman (n.d.) who postulates that
automation reduces smuggling and increases revenue flows. This is further
supported by UNCTAD (2010) which asserts that ASYCUDA is designed to
prevent smuggling through inbuilt capabilities of the system. The findings also
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revealed that ASYCUDA does not curb challenges associated with classification
of goods.
4.2.6 HOW ASYCUDA HAS HELPED EMPLOYEES TO DISCHARGE THEIR DUTIES MORE EFFECTIVELY
The interviewees were asked how ASYCUDA has helped them to discharge their
duties more effectively and their responses are contained in table 4.6 in Appendix
7. The responses from the interviewees indicated that nine out of the ten
interviewees were of the opinion that ASYCUDA has helped them to reduce the
time they take to clear goods for clients. Several interviewees expressed
sentiments that ASYCUDA has drastically reduced the amount of time they take
to clear goods especially with the risk assessment module which allows goods to
be put into different routes with the green route being the fastest to clear. The
interviewees were however reluctant to give the average time it takes to clear
goods due to the fact that time taken to clear goods varies depending on where
entries are made, the volume of work that has to be done, whether adequate
information had been provided and whether the bill of entry has completed
correctly amongst other factors. However, one interviewee said the clearance of
goods should on average take at most three hours if all things are held constant.
The majority of the interviewees being nine out of ten were of the view that
ASYCUDA has helped them to improve efficiency in their day to day operations,
reduce the number of errors they make and provide more accountability for work
done. Regarding the issue of accountability one interviewee stated, “ASYCUDA
has really transformed the way we do work because you are accountable for the
work you do using your profile and cannot afford to make reckless errors or
omissions because it will come back to you”.
The responses from seven out of ten interviewees shows that the majority of the
interviewees have found that ASYCUDA has helped to provide more effective
supervision due to the reason that ASYCUDA has different access levels and
allows managers to view and monitor transactions that are been done in the
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system thereby giving them room to take corrective action were appropriate. All
the interviewees agreed that ASYCUDA has helped them discharge their duties
more effectively by leaving an audit trail of the work they do and by providing
more checks and balances on the work they do.
Discussion of findings
The findings show that ASYCUDA has been instrumental in giving clients better
service delivery. In particular, the research shows that ASYCUDA has helped
employees to discharge their duties more effectively through faster clearance
processes through risk assessment. The finding that ASYCUDA reduces
clearance time is consistent with the findings stated in the World Customs Journal
(2009) which states that automation allows for faster clearance procedures and
risk profiling. The research also revealed that ASYCUDA has helped to improve
efficiency in the day to day operations of employees thereby allowing them to
discharge their duties more effectively. This is supported by Seing (n.d.) who
postulates that ASYCUDA helps to strengthen operational efficiency by
increasing transparency of operations thereby minimizing fraudulent activities,
reinforcing institutional capacity and improving data management.
ASYCUDA has also resulted in a reduction of errors made by officers for instance
when calculating duty due to automated calculations of duty. This position is
affirmed in the Worlds Customs Journal (2009) which attributes increased revenue
flows to automated computations of duty and taxes. This is further supported by
UNCTAD the developers of the system which asserts that ASYCUDA is designed
to improve computations of duty. ASYCUDA has also helped to provide more
accountability of work done officers thereby enabling them to discharge their
duties more effectively. Accountability arises due to the fact that each officer is
giving a profile to use to access ASYCUDA which then leaves an audit trail of all
the activities that are done in the system thereby making officers accountable for
their actions. The research has also shown that ASYCUDS has helped to provide
more effective supervision of work done due to the fact that it has different access
levels, one of which allows managers depending on their access levels to view and
monitor transactions being done in the system thereby allowing them to take
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corrective action were appropriate. ASYCUDA has helped employees to
discharge their duties more effectively by leaving an audit trail of the work they
do. This therefore provides the necessary checks and balances on work that is
being done.
4.2.7 HOW ASYCUDA HAS HELPED TO PROVIDE MORE EFFICIENT SERVICES TO CLIENTS.
The interviewees were also asked how ASYCUDA has helped to provide more
efficient services to clients. The responses are contained in table 4.7 in Appendix
8. The interviewees all agreed that ASYCUDA has helped to provide more
efficient services to clients by reducing direct interaction with clients, enabling
electronic processing of bills of entries and by allowing electronic communication
with clients. One interviewee stated that, “There is no need for clients to come to
ZIMRA offices as much as they used to as they can do their transactions
electronically by just a click of a button, thereby saving time and costs”. The
majority of the interviewees being nine out of ten were of the view that
ASYCUDA has enabled faster services to be provided to clients through
electronic processing of transactions. According to eight out of the ten
interviewees, ASYCUDA has benefited clients by enabling the correct rates of
duty to be applied since all tariffs and rates of duty are entered into the system
even when changes in legislation are made thus allowing for uniform application
of the law. Only four of the ten interviewees were of the view that ASYCUDA
helps clients by reducing discretion of officers which they indicated at times can
be used in an arbitrary manner and can be an incentive for corrupt behaviour.
Discussion of findings
The findings show that the use of ASYCUDA has to a large extent been effective
in providing more efficient services to clients. This has been achieved by reducing
the direct interaction with clients through the provision of electronic services such
as electronic filing of bills of entry and supporting documents, electronic
assessments and electronic payments amongst other things. This means that
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clients do not need to come to ZIMRA offices and wait in long endless queues to
have transactions processed. The findings also show that clients have been able to
be provided with faster services through electronic processing of transactions.
Clients have also benefited from the use of ASYCUDA due to the fact that there is
automated computation of duty and or taxes in the system thus enabling the
correct rates of duty to be applied since all tariffs and rates of duty are entered into
the system which also allows for uniform application of the law. Only four of the
ten interviewees were of the view that ASYCUDA helps clients by reducing
discretion of officers. It can therefore be inferred from the results that this finding
is not conclusive.
4.2.8 CAUSES OF CHALLENGES FACED USING ASYCUDA
The interviewees were asked the causes of challenges that are encountered using
ASYCUDA. Their responses are contained in table 4.8 in Appendix 9. Lack of
skills and training on the part of officers and clients was identified by four out of
the ten interviewees. Two of the interviewees indicated that there is need for
continuous refresher courses to be offered by ZIMRA more frequently to improve
the skills of officers. Another interviewee stated that “It is imperative that clients
be trained on how to use ASYCUDA especially clearing agents as they represent
the bulk of the users of ASYCUDA on the clientele side”. Power outages were
identified as a major challenge by nine out of the ten interviewees as ASYCUDA
relies on the use of computers and internet which all in turn rely on use of
electricity. Systems failure was on the other hand identified by four out of the ten
interviewees. One interviewee said, “There have been a number of systems
challenges using ASYCUDA and at one point caused a public outcry when clients
at Beitbridge border post complained about system challenges at the border which
resulted in delayed clearance of motor vehicles at one point”.
Connectivity problems was cited as a challenge by nine out of ten interviewees.
The interviewees expressed concern at the connectivity challenges that continue to
be faced despite the fact that ZIMRA has engaged several reputable companies to
provide it with bandwidth services. One interviewee however stated,
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“Connectivity challenges are not peculiar to ZIMRA alone, they are in fact rooted
in our African continent due to various constraints that we encounter as
developing countries which is a fact that we all must embrace”. Another
challenge that was identified by five out of the ten interviewees is that of errors
made by clients when they complete the bill of entries. Such errors result in either
the system initially rejecting the entry or in the officers raising queries at a later
stage which all results in delayed clearance of goods.
Discussion of findings
The findings show that causes of challenges that are encountered using
ASYCUDA due to lack of skills and training on the part of officers and clients
was only identified by four out of the ten interviewees. This finding is therefore
not conclusive due to the low response rate and shows that lack of training and
skills is not a challenge for the majority of employees. This finding is inconsistent
with recommendations by Reza (1996) on continuous training of staff on the role
of customs and functions of ASYCUDA. Lack of skills has however been
identified as a challenge by a number of scholars such as World Tax Journal and
The Global Information technology Report (2012).
The findings show that power outages is a challenge that is encountered when
using ASYCUDA. Power outages therefore result in the system not being
functional due to the fact that it relies on the use of computers and internet. This
finding is supported by the UNCTAD Secretariat Review of Maritime Transport
(2010) which found that the effectiveness of ASYCUDA is hampered by lack of
reliable electricity and communication thus resulting in manual clearance
processing thereby resulting in delays and rent-seeking behaviour by traders and
officials. Systems failure was on the other hand identified by four out of the ten
interviewees and may therefore not be regarded as a conclusive finding. This
finding is however contrary to findings in the Global Information Technology
Report (2012) which identified systems failure as one of the challenges of using
information technology, which ASYCUDA is part and parcel off. Other revenue
authorities such as Zambia, Uganda and St Lucia Customs Department also
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identified systems failure as a challenge that they encounter when using
ASYCUDA.
The findings also show that connectivity problems are a challenge that is
encountered when using ASYCUDA despite efforts that have been made by
ZIMRA to engage several reputable companies to provide it with bandwidth
services. This finding is consistent with the finding of other revenue authorities
who have encountered similar challenges such as Nepal Revenue Authority,
Papua New Guinea Customs Services and Ugandan Revenue Authority amongst
others. Errors made by clients is another challenge that emerged from the study
which causes challenges, though this challenge has not been identified in the
literature review.
4.2.9 HOW ASYCUDA HAS BENEFITED CLIENTS
The interviewees were asked how ASYCUDA has benefited clients and their
responses are indicated in table 4.9 in Appendix 10. ASYCUDA is said to have
benefited the clients by reducing transaction costs for clients by nine out of ten
interviewees. The interviewees attributed this to the fact that clients are able to do
transactions electronically through the internet without coming to ZIMRA offices,
faster clearance of goods thereby reducing storage costs and through streamlining
cumbersome clearance procedures. In the same vein ASYCUDA is said to have
benefited clients by bringing convenience to clients by nine out of ten
interviewees through electronic transactions that can be carried out from any place
in the world such as electronic filing of bills of entry and documents, electronic
assessments and electronic payments.
Streamlining of cumbersome clearance procedures is another benefit which seven
out of the ten interviewees identified as a benefit to clients. One interviewee had
this to, “The introduction of ASYCUDA has dispensed with the multiple
processes that had to be complied with when goods were cleared manually,
moving from office to office and waiting in long tedious queues for hours on end
with a lot of documents. Now all the client has to do is to file the bill of entry in
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less five minutes or so and wait from an assessment, pay duty and have the goods
cleared”. The interviewees all unanimously agreed that ASYCUDA has benefited
clients through faster clearance of goods and through efficient service delivery.
Discussion of findings
The findings show that the implementation of ASYCUDA has benefited the
clients by reducing transaction costs for clients due transactions which can be
done electronically through the internet without coming to ZIMRA offices and
through streamlining of cumbersome procedures and through faster clearance of
goods. This position is supported by other revenue authorities such as Dominican
Republic Customs Department (www.dominica.gov) and Kamajugo (2014) of the
Ugandan Revenue Authority who have found that the implementation of
ASYCUDA has resulted in reduced costs to both clients and revenue
administration as it minimizes administration costs which helps traders to save
money and has resulted in faster clearance of goods thereby minimizing storage
costs and through electronic processing of transactions.
Streamlining of cumbersome clearance procedures is another benefit which
emerged from the study and this is supported by Farzaneh et al. (2014) who assert
that ASYCUDA helps to simplify customs procedures by decreasing the number
of declarations and attached documents as alluded to above. The findings further
show that ASYCUDA has benefited clients through faster clearance of goods and
through efficient service delivery. This position has been enunciated by
Savchenko (n.d.) who asserts that a key part of ASYCUDA is the use of risk
management which allows for appropriate selective control where it is necessary
and allows for faster clearance of goods and effective detection of customs
violations.
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4.2.10 FACTORS WHICH HAVE HINDERED ZIMRA FROM REALISING THE FULL BENEFITS OF ASYCUDA
Interviewees were asked what in their opinion they considered to be factors which
hindered ZIMRA from realising the full benefits of ASYCUDA and the responses
are contained in table 4.10 in Appendix 11. One of the interviewees did not
consider that they were any factors which hindered ZIMRA from realising the full
benefits of ASYCUDA due to the fact that ASYCUDA was tailor made to fit
ZIMRA’s requirements and is very happy with how the system operates. Lack of
resources was cited as a factor by one out the ten interviewees and the interviewee
was of the opinion that there is need for more resources like computers and
internet to be channelled to other border posts in order to realise the full benefits
of the system. Only four of the interviewees were of the opinion that system
failure was hindering ZIMRA from realising the full benefits of the system.
Connectivity challenges were cited as a factor which hindered ZIMRA from
realising the full benefits of the system by nine out of ten interviewees due to the
fact this resulted in delayed clearance of goods causing back logs and long queues
whilst at other times it meant resorting to the manual system which are all
supposed to be eradicated with the use of ASYCUDA. Corruption was cited as a
factor that is hindering ZIMRA from realising the full benefits of ASYCUDA by
six out of ten interviewees due to the reason that people find means and ways to
circumvent the system and channel much needed revenue which should be
collected for the fiscus into their own pockets and for their own selfish gains when
ASYCUDA is meant to enhance revenue collections.
Discussion of findings
The finding conclusively show that connectivity challenges hindered ZIMRA
from realising the full benefits of the system which results in delayed clearance of
goods causing back logs and long queues whilst at other times it meant resorting
to the manual system which are all supposed to be eradicated with the use of
ASYCUDA. Corruption is another challenge which the findings show as a factor
that is hindering ZIMRA from realising the full benefits of ASYCUDA due to rent
seeking behaviour which undermines revenue collections whilst people pocket
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money for their own private gains. The study shows that the finding on lack of
resources was not conclusive as this was cited as a factor by one out the ten
interviewees. The finding that systems failure was a factor which hindered
ZIMRA from realising the full benefits of ASYCUDA was not conclusive as well
as this was only supported by four out of the ten interviewees. The finding that
there are no factors which have hindered ZIMRA from realising the full benefits
of ASYCUDA is also not conclusive as this was only supported by one
interviewee.
4.2.11 STRATEGIES THAT CAN BE PUT IN PLACE TO EFFECTIVELY UTILIZE ASYCUDA IN CURBING CUSTOMS ADMINISTRATIVE CHALLENGES.
Lastly the interviewees were asked what strategies can be put in place to
effectively utilize ASYCUDA to curb customs administrative challenges. The
interviewees’ responses are contained in table 4.11 in Appendix 12. Adopting
more modules was identified as a possible strategy that can be put in place by six
out of ten interviewees. Training of staff and other stakeholders was cited by only
four out of the ten interviewees. Dealing with connectivity challenges was
identified by nine out the ten interviewees as a strategy that can be employed to
effectively utilise ASYCUDA. The majority of the interviewees being seven out
of ten pointed out that the manual system should be done away with in order to get
the system fully operational and to effectively utilise ASYCUDA to curb customs
administrative challenges. The last strategy that was highlighted by three of the
interviewees is that ASYCUDA should be rolled out to all stations to allow for
consistency, uniform application of the law, better supervision mechanisms and
enhanced revenue collections.
Discussion of findings
The findings show that ZIMRA should adopt more modules which were left out of
the system to effectively utilise the system. ZIMRA should also deal with
connectivity challenges to ensure that it reaps the full benefits of ASYCUDA as
this will enable the system to be functional all the time which will increase
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efficiency and clearance of goods and increase revenue flows. The findings also
show that ZIMRA should do away with the manual system in order to reap the full
benefits of ASYCUDA. The findings on training of staff and other stakeholders
and rolling out ASYCUDA to all stations were not conclusive due to the low
responses.
4.3 CLEARING AGENTS: FINDINGS FROM STUDIES OBJECTIVES
4.3.1 DEMOGRAPHICS OF CLEARING AGENTS
Table 4. 12 in Appendix 13 contains the responses from the interviewees. The
majority of the interviewees are between the ages of 40 and 49, that is five out of
the seven interviewees. The other two interviewees are between the ages 21 to 30
and 31 to 40. The age of the interviewees shows that the majority of them a lot of
years of working experience. The majority of the interviewees also have degrees
with only two out of the seven interviewees with diplomas showing that the
interviewees have a high level of literacy thereby promoting the validity of the
findings.
4.3.2 RATING OF SERVICE DELIVERY BY ZIMRA OFFICIALS USING ASYCUDA
The interviewees were asked to rate the service delivery of ZIMRA official
officials using ASYCUDA and their responses are indicated in table 4.13 in
Appendix 14. The majority of the interviewees, that is, four out of seven said that
service delivery was moderate mainly due to the challenges they have experienced
such as connectivity challenges and power outages which have all adversely
affected service delivery to clients. The remaining three interviews said that the
service was good and expressed that they were happy with the system despite
some challenges which are faced here and there.
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Discussion of findings
The rating on the service delivery provided by ZIMRA officers using ASYCUDA
can be said to be satisfactory due to the responses that were given by the
interviewees as the majority of the interviewees rated the service as moderate.
This however shows that there is still room for improvement in order to provide
better services to clients in line with the moto “We are here to serve”.
4.3.3 AVERAGE TIME TAKEN TO LODGE BILLS OF ENTRIES IN ASYCUDA
The interviewees were asked the average time it takes to lodge bill of entries in
ASYCUDA and the responses are depicted in table 4.14 in Appendix 15.The
interviewees said that the time taken to lodge a bills of entry depends on a number
factors such as the number entries that are being made which depends on the
number of goods that are being declared, the speed of the clearing agent, the
clearing agent’s knowledge of how to use ASYCUDA amongst other factors. The
research showed that is no specific time frame for lodging bills of entries but the
clearing agents were able to give the average time it takes them to lodge bills of
entry. Three of the interviewees indicated that it takes them less than ten minutes
whilst four of the interviewees indicated that it takes them less than 30 minutes to
lodge bills of entries in ASYCUDA.
Discussion of findings
It can be concluded from the findings that the average time it takes to a lodge a bill
of entry is less than thirty minutes as alluded to by the majority of the interviewees
due to the number of variables that come into play as indicated above.
4.3.4 AVERAGE TIME TAKEN TO RECEIVE FEEDBACK FROM ZIMRA
The interviewees were asked the average time it takes to receive feedback from
ZIMRA and their responses are shown on table 4.15 in Appendix 16. The
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interviewees indicated that once they register a bill of entry immediate feedback is
given by the system wherein a bill of entry number is assigned and this is proof
that the bill of entry will have been accepted in the system and is receiving
attention. In this regard one interviewee indicated that on average it takes about
one minute to receive this immediate feedback. Another interviewees response
was, “ This is based on the fact that as soon as your register your entry, it
immediately routes to a particular colour which relates to the process being
undertaken, such as yellow being ‘doc check’ etc, after this immediate response, it
can take longer to have actual entry feedback”. There after it takes a longer period
to receive feedback from ZIMRA and one interview said it takes less than 30
minutes whilst five interviewees indicated that it takes between two to four hours
to receive feedback.
Discussion of findings
Although the system gives one immediate response by giving clients a bill of entry
number, it can be concluded from the findings that it takes on average between two
to four hours to receive actual feedback regarding the bill of entry from ZIMRA as
alluded to by the majority of the interviewees.
4.3.5 AVERAGE TIME TAKEN TO CLEAR GOODS USING ASYCUDA
The interviewees were asked what the average time taken to clear goods using
ASYCUDA is and their responses are contained in table 4.16 in Appendix 17.
The interviewees said that it is difficult to put an exact time frame due to the fact
that they are a number of factors that come into play depending on the nature of
goods, whether the goods have been placed in the green route, blue route, yellow
route or red route and also depends on the pressure of work at ZIMRA amongst
other things. One interviewee indicated that it takes less than four hours, whilst
three said it takes less than one day. Another interviewee said it takes between
one and two days whilst two indicated that it takes more than two days. This is
also in line with the responses from the ZIMRA officers who stated that they
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could not give a time frame on how long it takes to clear goods in either the green,
blue, yellow or red route due to the fact that they a number of factors that come
into play as already been alluded to above.
Discussion of findings
The responses given by the interviewees cannot be said to be conclusive due to the
low response rates in each category and especially when one considers that they
initially indicated that it is difficult to put a time frame due to the number of
factors that come to play as indicated above.
4.3.6 HOW THE USE ASYCUDA HAS BENEFITED CLIENTS.
The interviewees were asked how the use of ASYCUDA has benefited them as
clients and their responses are indicated in table 4.17 in Appendix 18. The
majority of the interviewees being six out of seven said that ASYCUDA had
helped them receive more efficient services from ZIMRA and had resulted in
reduced transaction costs for clients. One interviewee in particular stated, “The
introduction of ASYCUDA has certainly decreased costs for clients, instead of
travelling all the way to Beitbridge for example one only needs to go on the
internet and do all the clearance processes using ASYCUDA, even in the comfort
of your own home if possible. This definitely reduces costs and risks associated
with travelling, accommodation costs, and idle time being spent at borders trying
to clear goods amongst other things”. Convenience brought to clients was another
benefit cited by six out of the seven interviewees. The interviewees in this regard
highlighted that electronic processing of transactions such as the use of electronic
lodging of bills of entry and documents, electronic assessments, electronic
payments and electronic communication with officers had all brought convenience
to them as clients. Streamlining of cumbersome procedures is also another benefit
which was identified by all the interviewees who indicated how much easier it is
to have goods cleared using ASYCUDA than it was in the past using the manual
system. One interviewee stated that, “ASYCUDA has helped to reduce the
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number of burdensome processes that needed to be complied with during the
whole clearance process”.
All the interviewees indicated that they ae able to make electronic payments
using their banks which are connected to the system. The interviewees were very
appreciative of this development as payments can be made from any place without
travelling to the border where the goods to be cleared are. Another benefit cited
by four put of the seven interviewees is that ASYCUDA has helped to reduce
corruption. This was attributed to the fact that there was now reduced face to face
interaction with the officials and that once ones papers are found to be in order
and are already in the system it becomes difficult for officers to try and
manipulate the system. Reduced smuggling through the border posts was also
cited as a benefit to clients by five out of seven interviewees. This is due to the
fact that when lodging a bill of entry one is supposed to list all the goods they
have or risk being penalised for making false declarations or for smuggling goods
which is in turn beneficial for compliant clients as smuggled goods result in them
being sold cheaper in the market.
Discussion of findings
The findings show that ASYCUDA has helped clients to receive more efficient
services from ZIMRA and have resulted in reduced transaction costs for clients.
This position is supported by other revenue authorities such as Dominican
Republic Customs Department (www.dominica.gov) and Kamajugo (2014) of the
Ugandan Revenue Authority who have found that the implementation of
ASYCUDA has resulted in reduced costs to clients. The findings also show that
ASYCUDA has resulted in more convenience bring brought to clients through
electronic processing of transactions. Cumbersome clearance procedures have also
been streamlined according to the findings that were made. This is supported by
Farzaneh et al. (2014) who assert that ASYCUDA helps to simplify customs
procedures by decreasing the number of declarations and attached documents as
alluded to above. Reduced corruption was also identified as a benefit which was
attributed to reduced face to face interaction with the officials. This is supported
by Seing (n.d.) who asserts that ASYCUDA helps to reduce corruption due
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electronic processing of bills of entry thus reducing direct interaction between
officials and clients. This position is further supported by Crandall and Kidd
(2010) who postulate that the use of automated systems helps to reduce corruption
and allows for timely detection of corrupt behaviour. The findings also showed
that another benefit to clients was reduced smuggling through the border posts as
smuggling was adversely affecting businesses of legitimate traders. This position
is supported by UNCTAD (2010) which has also asserted that ASYCUDA is
designed to prevent smuggling through inbuilt capabilities of the system. These
benefits except reduced smuggling were all identified by the ZIMRA employees
which helps to corroborate the findings as well.
4.3.7 CAUSES OF CHALLENGES FACED USING ASYCUDA
The interviewees were are the causes of challenges they face when using
ASYCUDA. Their responses are contained in table 4.18 in Appendix 19. The
interviews identified a total of seven challenges that they face when using
ASYCUDA. The first challenge that was identified by four out of the seven
interviewees was lack of training and skills. The interviewees indicated that as
clients they faced challenges in getting adequate training due to limited resources
that have available to them especially since ASYCUDA is used in a specialised
field hence training is not readily available. Only one interview said they face
challenges in using ASYCUDA due to the fact that the system is complicated.
Power outages was identified as a challenge in using ASYCUDA by four out of
the seven interviewees as this means that no transactions can be carried out when
there is no electricity. Systems failure on the other hand was cited as a challenge
by six out of the seven interviewees. The interviewees expressed their dismay
with the system challenges that ZIMRA faces and indicated that this also has
adverse effects on their business due to delayed clearance of goods.
The interviewees all unanimously agreed that connectivity challenges were a
major challenge they faced using ASYCUDA. One of the interviewees stated, “I
have noticed that ASYCUDA is always down every day at 12pm and 4pm. I am
not sure what the problem is, maybe they will be too many people using the
83
system during this time or the network will be down or something but l have
always failed to use the system during these times”. Only three interviewees
indicated that the challenges that are faced are due to errors made by clients when
utilising the system. One interviewee said, “Once an error is made the system
may reject the bill of entry depending on the nature of the error or if the bill of
entry is accepted and an error is detected at assessment stage the bill of entry will
not be processed until the error is corrected thereby delaying the whole clearance
process”. The majority of the interviewees that is five out of the seven
interviewees indicated that inadequate resources is another challenge they face. In
this regard the interviewees pointed out that they had challenges in accessing more
modern computers, laptops and the internet.
Discussion of findings
The findings show that lack of training and skills is a challenge that is faced by
clients due to limited resources and due to the fact that they are dealing with a
specialised area contrary to the findings of the ZIMRA interviewees. This is
supported by the World Tax Journal (n.d.) which states that most clearing agents
have limited knowledge and skills to use IT efficiently and it has been challenging
for them to comply with the requirement to exchange electronic information with
customs. The findings further show that power outages are a challenge that is
faced when using ASYCUDA due to the fact that it uses computers and internet
which rely on electricity.
Systems failure was also another challenge which emerged from the study
contrary to the findings of the ZIMRA interviewees. This finding is in conformity
with the findings in the Global Information Technology Report (2012) which
identifies systems failure as one of the challenges of using information
technology, which ASYCUDA is part and parcel off. The findings also show that
connectivity challenges are a major challenge the interviewees face using
ASYCUDA which results in delayed clearance of goods. This finding is
consistent with the finding of other revenue authorities who have encountered
similar challenges such as Nepal Revenue Authority, Papua New Guinea Customs
Services and Ugandan Revenue Authority amongst others. The findings also
84
revealed that inadequate infrastructure is another challenge that is faced when
using ASYCUDA due to challenges in accessing more modern computers, laptops
and internet. This finding is supported by the Zambian and Ugandan Revenue
Authorities which all cite challenges that customers and in particular clearing
agents face with inadequate infrastructure.
4.3.8 STRATEGIES ZIMRA SHOULD ADOPT TO EFFECTIVELY UTILISE ASYCUDA
The interviewees were asked what strategies should be adopted to effectively
utilise ASYCUDA and their responses are depicted in table 4.19 in Appendix 20.
The majority of the interviewees, that is, six out of seven interviewees said that
ZIMRA should embark on training programmes for its staff and stakeholders, like
clearing agents for example. It was further noted that this would be beneficial as
this would allow effective systems utilisation by users of the system. All the
interviewees pointed out that ZIMRA should deal with connectivity issues which
they considered to be the biggest challenge they encounter when using the system.
Doing away with the manual system was identified by four out of the seven
interviewees as a measure which should be taken to effectively utilise
ASYCUDA. The majority of the interviewees being five out of seven
interviewees said that ASYCUDA should be rolled out to all stations to effectively
utilise the system and to allow for consistency.
Discussion of findings
The findings show that ZIMRA should embark on continuous training of staff and
stakeholders as a strategy to effectively utilise ASYCUDA and this finding is
supported by Reza (1996) who recommends the continuous training of staff on the
role of customs and functions of ASYCUDA. The research also revealed that
ZIMRA must deal with connectivity issues to enable effective systems utilisation.
Another strategy is that ZIMRA should do away with the manual system to
effectively utilise ASYCUDA. This is supporte
which asserts that
outdated manual procedures alongside ICT practices. The majority of the
interviewees being five out of seven interviewees said that ASYCUDA should be
rolled out to all stations to effectively utilise the system and to allow for
consistency.
4.4 REVISED CONCEPTUAL FRAMEWORK
The conceptual framework in chapter two was revised to incorporate research
findings.The conceptual framework was modified by putting
dotted line to show that the use of ASYCUDA does not result in reduced
smuggling as shown in the findings.
Figure 4.1 Revised Conceptual framework
Source: the researcher’s own construction
effectively utilise ASYCUDA. This is supported by The World
which asserts that the benefits of ICT can be undermined by continuing to use
outdated manual procedures alongside ICT practices. The majority of the
interviewees being five out of seven interviewees said that ASYCUDA should be
rolled out to all stations to effectively utilise the system and to allow for
CONCEPTUAL FRAMEWORK
The conceptual framework in chapter two was revised to incorporate research
findings.The conceptual framework was modified by putting
dotted line to show that the use of ASYCUDA does not result in reduced
smuggling as shown in the findings.
Figure 4.1 Revised Conceptual framework
Source: the researcher’s own construction
85
d by The World Bank (2005)
the benefits of ICT can be undermined by continuing to use
outdated manual procedures alongside ICT practices. The majority of the
interviewees being five out of seven interviewees said that ASYCUDA should be
rolled out to all stations to effectively utilise the system and to allow for
The conceptual framework in chapter two was revised to incorporate research
findings.The conceptual framework was modified by putting an arrow with a
dotted line to show that the use of ASYCUDA does not result in reduced
86
4.5 RELIABILITY AND VALIDITY OF FINDINGS
The findings are reliable as there is transferability in that there is evidence to
support the generalisations of findings to other contexts as has been shown in the
findings. The findings are also dependable in that the interviewees were highly
experienced and knowledgeable in the area and therefore it is highly likely that
similar results will be obtained if the study is repeated. The findings were also
credible due to the fact that interviewees were kept anonymous from each other to
prevent unwarranted influences.
4.6 CHAPTER SUMMARY
This chapter presented data findings, data analysis and interpretation of research
findings. Tables were used to present findings of seventeen interviewees. The
study shows that ASYCUDA has to a large extent been effective in curbing
customs administrative challenges such corruption, cumbersome clearance
procedures, theft revenue leakages amongst other things. The findings also show
that ASYCUDA has benefited clients by reducing transaction costs, enabling
faster clearance of goods, streamlining cumbersome clearance procedures and by
bringing convenience to clients. ASYCUDA has also enable employees to
discharge their duties more effectively by leaving an audit trail of work done,
providing more effective supervision, allowing goods to be cleared faster,
providing checks and balances of work that is done and reducing errors that are
made amongst other things. The findings revealed that ASYCUDA has not been
effective in curbing some challenges like smuggling and legislative challenges.
The study also identified a number of challenges that are encountered when
utilising ASYCUDA such as power outages, connectivity challenges and
corruption. The study further showed that a number of strategies can be put in
place to enable ZIMRA to effectively utilise ASYCUDA such as adding more
modules that have been omitted from the system, removing manual processes,
training of staff and clients and by dealing with connectivity challenges.
87
CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
5.0 INTRODUCTION
This chapter presents conclusions that were derived from the study and revisits
the proposition in chapter one. The chapter also contains recommendations on
how ZIMRA can effectively utilise ASYCUDA to curb customs administrative
challenges. The chapter gives the conclusion, tests the research proposition,
discusses the conceptual framework, contribution to body of knowledge and
provides recommendations.
5.1 CONCLUSION
The conclusions that were drawn from the study in relation to each objective are
as follows:
5.1.1 CUSTOMS ADMINISTRATIVE CHALLENGES FACED BY ZIMRA.
It can be concluded from the findings that ZIMRA faces a number of
challenges which include corruption, smuggling, theft, revenue leakage,
cumbersome clearance procedures, transit monitoring, risk assessment,
warehousing problems, classification of goods and legislative challenges.
5.1.2 AREAS WERE AUTOMATION HAS SUCCEEDED AS AN IT AN IT INTERVENTION IN CURBING CUSTOMS ADMINISTRATIVE CHALLENGES IN ZIMRA.
88
Automation has played a key role in curbing customs administrative
challenges in ZIMRA. The findings in chapter four show that ASYCUDA
has as an automated system helped to curb corruption, theft, revenue
leakages, cumbersome clearance procedures, risk assessment and customs
transit monitoring and warehousing challenges. The findings also show that
ASYCUDA has to a very large extent helped employees to discharge their
duties more effectively and has helped clients to be provided with more
efficient services.
5.1.3 AREAS WERE AUTOMATION HAS FAILED AS AN IT AN IT INTERVENTION IN CURBING CUSTOMS ADMINISTRATIVE CHALLENGES IN ZIMRA.
It can be concluded from the findings in chapter four the ASYCUDA has as
an automated system failed to curb smuggling which is one of the major
challenges that ZIMRA faces. The findings further reveal that ASYCUDA
has failed to curb challenges associated with classification of goods.
5.1.4 CHALLENGES THAT IMPEDE THE EFFECTIVENESS OF AUTOMATED SYSTEMS.
The findings depict that power outages, connectivity problems, errors made
by clients, lack of skill and training, systems failure, power outages,
connectivity problems and lack of adequate infrastructure hinder the effective
use of automated systems.
5.2 TESTING THE RESEARCH PROPOSITION The study sought to test the following proposition:
Automation has been effective in curbing customs administrative challenges in
ZIMRA.
The researcher established that they are ten challenges that are faced by ZIMRA
in its customs operations. However, out all of the challenges that were identified
smuggling and problems associated with classification of goods are the only
89
challenges that ASYCUDA as the automated system used by ZIMRA has not
been able to curb. This therefore means that it can be concluded that ASYCUDA
has to a large extent been effective in curbing customs administrative challenges
hence the studies proposition can be accepted.
5.3 CONCEPTUAL FRAMEWORK
The studies original conceptual framework depicted the causes of ASYCUDA
effectiveness and the perceived benefits of ASYCUDA in curbing customs
administrative challenges. The revised conceptual framework retained all the
causes of ASYCUDA effectiveness and retained all the benefits of ASYCUDA
except reduced smuggling as this was not supported by the findings. The
conceptual framework was therefore modified by putting an arrow with a dotted
line to show that the use of ASYCUDA does not result in reduced smuggling.
5.4 CONTRIBUTION TO THE BODY OF KNOWLEDGE
The study has contributed to the existing body of knowledge by bringing out new
insights on the challenges that customs administrations face. The study has also
confirmed that the use of ASYCUDA does not result in reduced smuggling as
postulated by some scholars. The study has further identified challenges which
were not identified in literature which are transit monitoring challenges and
warehousing challenges. The study has also shown that challenges faced by
customs administrations are not universal in nature as some challenges differ
depending on the environmental factors at play in different countries.
5.5 RECOMMENDATIONS
The following recommendations were made in order to enhance the effective use
of ASYCUDA in curbing customs administrative:
90
5.5.1 Adoption of modules that have been left out
The study revealed that although ZIMRA has automated its processes using
ASYCUDA there are still some processes which have not been automated.
ZIMRA has found it difficult to automate some processes due to various
constraints. However, the study has shown that piecemeal automation is
ineffective and in order to reap the full benefits of ASYCUDA it is
recommended that ZIMRA fully automate all its processes. This can be
achieved by adopting modules that were left out of the system due to various
reasons like high costs of implementation.
5.5.2 Continuous training
The study has revealed that clients who are being represented by clearing
agents have a skills and capacity gap when it comes to using automated
systems. It is therefore recommended that there be continuous training of
staff and other stakeholders like clearing agents who represent the majority of
clients to ensure that users of the system are well equipped and have the
adequate skills to utilise the system.
5.5.3 Connectivity challenges
Connectivity challenges remain a major challenge for ZIMRA as shown in
the study. It is recommended that connectivity challenges be addressed by
adopting faster bandwidth services such as fibre optic at all stations in order
to effectively utilise ASYCUDA. Wi-Fi form different service providers can
also be used as back up in the event that internet from one service provider
goes down then wireless services from another service provider will then
automatically start working. It is further recommended that ZIMRA should
invest in bandwidth with more capacity so that internet services are not slow.
91
5.5.4 Eradication of manual system
It is recommended that the manual system be done away with in order to get
ASYCUDA fully operational as the study has shown that use of the manual
system alongside automated systems leads to leads to ineffectiveness of
automation. Use of the manual system also results in abuse of the system as it
is prone to exploitation such as corrupt practices and results in delays in the
clearance processes.
5.5.5 Power outages
Power outages can be addressed by ZIMRA investing in alternative energy
supplies. It is therefore recommended that ZIMRA invest in solar panels at
all border posts as they are less costly to operate. This will enable
ASYCUDA to remain fully operational during times that electricity supply is
cut off.
5.5.6 Rolling out ASYCUDA at all border posts
The last recommendation is for ASYCUDA to be rolled out at all stations so
that there is no piecemeal application of the system. This will also enable the
system to be utilised more effectively and will allow for consistency, uniform
application of the law, better supervision mechanisms and enhanced revenue
collections at all borders.
5.6 AREAS OF FURTHER STUDY
The research that was undertaken is qualitative in nature which resulted in certain
limitations that are faced with qualitative studies as already alluded to in chapter
three. It is therefore suggested that a quantitative study of a similar nature can be
undertaken in order to quantify how ASYCUDA has been effective in curbing
customs administrative challenges. Another quantitative study can also be
92
undertaken to assess the effectiveness of ASYCUDA in clearing goods. This
will enable a more effective assessment of the time taken to clear goods in
ZIMRA to be undertaken through a quantitative study as it is important to know
how effective and efficient the use of ASYCUDA has been in clearing goods in
ZIMRA. This arises from the fact that the study revealed that interviewees were
very reluctant to state the average time it takes to clear goods on the basis that
they are a number of factors which come into play hence found it difficult to give
a specific time frames.
93
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Websites
(http://intel.welchallyn.com).
www.asycuda.org
http://libguides.usc.edu/content.php?pid=83009&sid=616083
http://www.sagepub
www.dominica.gov
99
APPENDICES
100
APPENDIX 1
101
APPENDIX 2
Table 4.1 Demographics of ZIMRA employees
Respondent Age of Respondent Period of employment in ZIMRA (years)
Position in the organisation
1 40-49 Over 15 Middle manager 2 40-49 11-15 Middle manager 3 Above 50 Over 15 Senior manager 4 40-49 11-15 Senior manager 5 Above 50 Over 15 Middle manager 6 Above 50 Over 15 Senior management 7 40-49 Over 15 Middle manager 8 Above 50 Over 15 Middle manager 9 40-49 11-15 Middle manager 10 40-49 11-15 Middle manager
102
APPENDIX 3
Table 4.2 Identification of customs administrative challenges
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Corruption √ √ √ √ √ √ √ √ √ √
Smuggling √ √ √ √ √ √ √ √ √ √
Theft √ √ √ √ √ √ √ √ √ √
Revenue
fraud/leakage
√ √ √ √ √ √ √ √ √ √
Classification of
goods
√ √ √ √ √ √ √ √ √ √
Cumbersome
clearance
procedures
√ √ √ √ √ √ √ √ √ √
Customs transit
monitoring
√ √ √ √ √ √ √ √ √ √
Legislative
challenges
√ √ X √ √ X X √ X √
Warehousing
problems
√ √ √ √ √ √ √ √ √ √
Risk assessment √ √ √ √ √ √ √ √ √ √
Key = √ means yes
X means no
103
APPENDIX 4
Table 4.3 ASYCUDA functions/modules used by ZIMRA
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Electronic
lodging of bills of
entry/declarations
√ √ √ √ √ √ √ √ √ √
Electronic
assessments
√ √ √ √ √ √ √ √ √ √
Electronic
payments
√ √ √ √ √ √ √ √ √ √
Risk assessment
and selectivity
√ √ √ √ √ √ √ X √ √
Customs transit
system
√ √ √ √ √ √ √ √ √ X
Warehouse √ √ X √ X √ √ √ √ X
104
APPENDIX 5
Table 4.4 Areas were ASYCUDA has helped to curb customs administrative challenges
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Corruption √ √ √ √ √ √ √ X √ √
Theft/ fraud X X √ X X √ √ √ √ √
Revenue leakage X √ √ √ √ √ √ √ √ √
Cumbersome
clearance
procedures
√ √ √ √ X √ √ √ √ √
Customs transit
monitoring
√ √ √ √ √ √ √ X √ √
Legislative
challenges
X √ √ X X X X X X X
Warehousing
problems
√ √ √ X X √ √ X X X
Risk assessment √ √ √ √ √ √ X √ √ √
105
Appendix 6
Table 4.5 Areas were ASYCUDA has failed to curb customs administrative
challenges
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Smuggling √ √ X √ √ X √ √ X X
Classification of
goods
X √ √ √ √ X √ √ √ √
106
Appendix 7
Table 4.6 How ASYCUDA has helped employees to discharge their duties more
effectively
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Reducing time
taken to clear
goods
√ √ √ √ √ √ √ X √ √
Improved
efficiency
√ √ √ √ √ X √ √ √ √
Reducing number
of errors made
√ √ √ √ √ X √ √ √ √
More effective
supervision
√ √ √ √ X X √ √ X √
Audit trail of
work done
√ √ √ √ √ √ √ √ √ √
Checks and
balances
√ √ √ √ √ √ √ √ √ √
Providing more
accountability of
work done
√ √ √ √ X √ √ √ √ √
107
Appendix 8
Table 4.7 How ASYCUDA has helped to provide more efficient services to
clients.
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Reduced direct
interaction with
clients
√ √ √ √ √ √ √ √ √ √
Electronic
processing of
bills of
entry/declarations
√ √ √ √ √ √ √ √ √ √
Electronic
communication
with clients
√ √ √ √ √ √ √ √ √ √
Faster service to
clients
√ X √ √ √ √ √ √ √ √
Use of correct
rates of duties
X √ X √ √ √ √ √ √ √
Reduced
discretion of
officers
X √ X √ X X √ X X √
108
Appendix 9
Table 4.8 Causes of challenges faced using ASYCUDA
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Lack of
skills/training
X √ X X X X √ √ √ X
Power outages √ √ √ √ √ √ √ √ √ X
Systems failure X X √ X X √ √ X X √
Connectivity
problems
√ √ √ √ √ √ √ X √ √
Errors made by
clients
√ √ √ X X X √ √ X X
109
Appendix 10
Table 4.9 How ASYCUDA has benefited clients
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Reduced cost for
clients
√ √ √ √ √ √ √ √ X √
Brought
convenience to
the transacting
public
√ √ √ √ √ X √ √ √ √
Streamlined
cumbersome
clearance
procedures
√ √ X √ √ X √ √ X √
Faster clearance
of goods
√ √ √ √ √ √ √ √ √ √
Efficient service
delivery
√ √ √ √ √ √ √ √ √ √
110
Appendix 11
Table 4.10 Factors which have hindered ZIMRA from realising the full benefits of
ASYCUDA
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Lack of resources X X X X X X X √ X X
Connectivity
challenges
√ √ √ √ X √ √ √ √ √
Systems failure X X √ X X √ X X √ √
Corruption √ √ √ √ X X X √ X √
111
APPENDIX 12
Table 4.11 Strategies that can be put in place to effectively utilize ASYCUDA in
curbing customs administrative challenges
Coding Respondent
1 2 3 4 5 6 7 8 9 10
Adopting more
modules
X √ √ √ √ √ X √ X X
Training of staff
and stakeholders
X √ √ X X X X √ √ X
Deal with
connectivity
issues
√ √ √ √ X √ √ √ √ √
Do away with the
manual system
√ √ X √ X X √ √ √ √
Roll out
ASYCUDA to all
stations
X X √ X X X √ √ X X
112
APPENDIX 13
Table 4.12 Demographics of clearing agents
Respondent Age of clearing agent Academic qualifications
1 21-30 Diploma
2 40-49 Diploma
3 31-40 Degree
4 40-49 Degree
5 40-49 Degree
6 40-49 Degree
7 40-49 Degree
113
APPENDIX 14
+Table 4.13 Rating of service delivery by ZIMRA officials using ASYCUDA
Coding Respondent
1 2 3 4 5 6 7
Moderate X √ √ X √ X √
Good √ X X √ X √ X
114
APPENDIX 15
Table 4.14 Average time taken to lodge bills of entries in ASYCUDA
Coding Respondent
1 2 3 4 5 6 7
Less than 10
minutes
√ X X √ √ X X
Less than 30
minutes
X √ √ X X √ √
115
APPENDIX 16
Table 4.15 Average time taken to receive feedback from ZIMRA
Coding Respondent
1 2 3 4 5 6 7
Less than 5
minutes
X X X √ X X X
Less than 30
minutes
√ X X X X X X
Between two to
four hours
X √ √ X √ √ √
116
APPENDIX 17
Table 4.16 Average time taken to clear goods using ASYCUDA
Coding Respondent
1 2 3 4 5 6 7
Less than four
hours
√ X X X X X X
Less than one day X X X √ X √ √
Between one and
two days
X X X X √ X X
Between two day
and three days
X √ √ X X X X
117
APPENDIX 18
Table 4.17 How the use ASYCUDA has benefited clients.
Coding Respondent
1 2 3 4 5 6 7
More efficient
services
√ X √ √ √ √ √
Reduced costs √ X √ √ √ √ √
Convenience X √ √ √ √ √
Streamlining
cumbersome
procedures
√ √ √ √ √ √ √
Electronic
payments
√ √ √ √ √ √ √
Reduced
corruption
√ X √ √ √ X X
Reduced
smuggling
√ X √ √ √ √ X
118
APPENDIX 19
Table 4.18 Causes of challenges faced using ASYCUDA
Coding Respondent
1 2 3 4 5 6 7
Lack of skills/
training
√ X √ √ X √ X
Complicated
system in place
√ X X X X X X
Power outages X X √ √ √ X √
Systems failure √ √ √ √ √ X √
Connectivity
problems
√ √ √ √ √ √ √
Errors made by
clients when
utilising the
system
X √ √ X X X √
Inadequate
infrastructure
√ √ √ X X √ √
119
APPENDIX 20
Table 4.19 Strategies ZIMRA should adopt to effectively utilise ASYCUDA
Coding Respondent
1 2 3 4 5 6 7
Training of staff
and stakeholders
√ √ √ √ X √ √
Deal with
connectivity
issues
√ √ √ √ √ √ √
Do away with the
manual system
X √ √ √ X X X
Roll out
ASYCUDA to all
stations
√ √ √ √ X X √
120
APPENDIX 21
INTERVIEW GUIDE
Introduction to the Interviewee
My name is Nokuthula Mpumela and I am a final year MBA student at the
Graduate School of Management, University of Zimbabwe.
I am currently doing a research study to assess the effectiveness of automation
as an information technology intervention in curbing customs administrative
challenges using Zimbabwe Revenue Authority as a case study. This research is
being conducted in partial fulfillment of the MBA Degree programme
requirements with the Graduate School of Management of the University of
Zimbabwe.
Thank you for affording me an opportunity to interview you and l am kindly
requesting to proceed with the interview. All responses will be kept confidential
and will be used for academic purposes only. Please note that you are free to
stop the interview at any time and you do not have to disclose any information
you are not comfortable to disclose.
Thank you for your support.
121
UNIVERSITY OF ZIMBABWE
MASTER OF BUSINESS ADMINISTRATION
Questions for ZIMRA staff
Section 1: Demographic Information What is your age?
1. What is your working period in ZIMRA
2. What is your position in the organization?
Section 2: Responses relating to the study’s object ives
1. Do you use Automated Systems for Customs Data (ASYCUDA) in your day to
day operations? 2. In your opinion do you think that ASYCUDA is helping to curb customs
administrative challenges?
3. In your opinion has ASYCUDA helped to curb any of the following customs administrative challenges and please explain your answer?
(i) [ ] Corruption (ii) [ ] Smuggling (iii) [ ] Theft/ fraud (iv) [ ] Revenue leakage (v) [ ] Classification of goods (vi) [ ] Cumbersome clearance procedures
(vii) [ ] Customs transit monitoring (viii) [ ] Legislative challenges (ix) [ ] Warehousing problems (x) [ ] Risk assessment
122
4. Has ASYCUDA helped you to discharge your duties more effectively? Please explain.
5. Which functions/modules of ASYCUDA are used by ZIMRA?
6. In your opinion has ASYCUDA helped you to discharge your duties effectively
and please explain how it has done so. 7. Please confirm and explain if ASYCUDA you to: (i) [ ] Reduce direct interaction/contact with clients (ii) [ ] Process bills of entry and declarations electronically (iii) [ ] Respond to clients queries electronically (iv) [ ] Receive feedback from clients electronically (v) [ ] Provide more efficient services to clients (vi) [ ]Reduce the amount of time you take to serve clients (vii) [ ] Apply the correct rates of duties by using appropriate tariffs (viii) [ ] Reduce your amount of discretion you exercise when doing your work
8. Please explain the challenges you encounter with ASYCUDA when discharging your duties?
9. What are the causes of the challenges you encounter when using ASYCUDA.
10. Please explain how ASYCUDA has benefited clients. 11. What major factors have limited ZIMRA from realising the full benefits of
ASYCUDA? 12. What strategies do you think ZIMRA should put in place to effectively utilize
ASYCUDA in curbing customs administrative challenges?
Thank you for your time.
123
APPENDIX 22
INTERVIEW GUIDE
Introduction to the Interviewee
My name is Nokuthula Mpumela and I am a final year MBA student at the Graduate
School of Management, University of Zimbabwe.
I am currently doing a research study to assess the effectiveness of automation as an
information technology intervention in curbing customs administrative challenges using
Zimbabwe Revenue Authority as a case study. This research is being conducted in partial
fulfillment of the MBA Degree programme requirements with the Graduate School of
Management of the University of Zimbabwe.
Thank you for affording me an opportunity to interview you and l am kindly requesting to
proceed with the interview. All responses will be kept confidential and will be used for
academic purposes only. Please note that you are free to stop the interview at any time
and you do not have to disclose any information you are not comfortable to disclose.
Thank you for your support.
124
UNIVERSITY OF ZIMBABWE
MASTER OF BUSINESS ADMINISTRATION
Questions for is Clearing Agents
Section 1: Demographic Information
1. What is your age?
2What are your educational qualifications?
Section 2: Responses relating to the study’s objectives
1. Are you familiar with Automated Systems for Customs Data (ASYCUDA)?
2. How would you rate the delivery of service rendered by ZIMRA officials through
the use of ASYCUDA?
3. Does ASYCUDA enable you to lodge declarations/ bills of entries electronically?
4. On average how long does it take you to lodge your bill of entry/declaration using
ASYCUDA?
5. On average how long does it take to receive feedback from ZIMRA?
6. On average how long does it take for goods to be cleared using ASYCUDA?
7. In your opinion do you think that ASYCUDA has helped ZIMRA to provide you
with more efficient services?
8. In your opinion do you think that the use of ASYCUDA has helped you to reduce
costs?
9. Has the use of ASYCUDA brought convenience to you as a client?
10. Has ASYCUDA helped to streamline cumbersome clearance procedures?
11. Does ASYCUDA enable you to make payments electronically?
125
12. In your opinion do you think that ASYCUDA has helped to reduce corruption in
ZIMRA?
13. In your opinion do you think that ASYCUDA has helped to reduce smuggling in
ZIMRA?
14. What are the causes of the challenges you face using ASYCUDA?
15. What strategies do you think ZIMRA should put in place to effectively utilize
ASYCUDA in curbing customs administrative challenges?
Thank you for your time.
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