Saturday, September 4, 2010

Kenya Changes Customs Regulations For Import Cargo Tax Collections

Concern Grows Over Illegal Imports
Shipping News Feature

KENYA – According to local press reports the Kenya Revenue Authority (KRA) has advertised for new applicants to act as import tax and duty collectors on behalf of the state authorities as worries over inefficient and insufficient checks on the pedigree and nature of cargo shipping into the country.

The new registrations will be verified by the KRA themselves as they have dropped the necessity of applicants’ first obtaining certification by the Kenya International Freight and Warehousing Association (KIFWA) as has previously been the case. The reason for the change appears to be the infighting within the trade organisation as a power struggle develops for leadership. For three years KIFWA have been dogged by problems with the Courts becoming involved to demand leadership elections.

Now a flood of illegal imports seems to have galvanised the KRA into action and in future potential tax collecting agents will not need the KIFWA certificate, costing around $90, as part of their application. Customers wishing to clear their own goods will be considered alongside freight forwarders as potential tax collectors.

The KRA’s actions seem to have been in part motivated by comments from the East African Business Council (EABC) who are holding a Regional Anti-Illicit Trade Conference in Nairobi on the 6th and 7th of October. The EABC estimate duty losses in the region to be at least $500 million annually and some estimates put the figure much higher.

The root of the problems appears to be the inability to monitor inbound goods with Customs Officials accused by the KRA of “an inability to recognise counterfeit items” coupled with no verification of actual contents unless there is a reasonable suspicion of undervalued items.

Problems with regard to Kenyan imports have persisted for some time. Readers interested in previous coverage can view an article HERE or a blog, complete with videos HERE.