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Revenue Authorities should facilitate ease of doing business
June 11, 2014, Nairobi: Manufacturers have called for consistency in operations and information required by the Revenue Authorities in the 3 partner states ie Kenya, Uganda and Rwanda so that operations are uniform even as the East African Community Single Customs Territory is anticipated to be rolled out on 1 July 2014. “There is need for synchrony among the Revenue Authorities when new programmes are being rolled out to guard against unnecessary delays at the port that are increasing costs for business,” said Ms. Akinyi Gikonyo, Kenya Association of Manufacturers (KAM) tax consultant.
These sentiments were expressed during the KAM-KRA Seminar held yesterday at Panafric Hotel Nairobi organised to review the Single Customs Territory and New Export Procedures.
Ms. Gikonyo, said KRA will need to have in place proper guidelines to guide the manufacturers on what is expected of them. She also called on KRA to look into their systems and procedures. “New procedures will be required as the old procedures cannot work on new systems”, she said. She reiterated on the need for the KRA personnel to be brought to speed on what is expected as the new system is being rolled out.
“Consolidation of cargo and the cargo manifest process needs to be made clear, user friendly and reduce the cost of doing business, said Ms Gikonyo.
The KRA presentation covered the concept of SCT, progress of the implementation of the SCT, export and import procedures under the SCT. The implementation roadmap was also reviewed as well as the national preparation on the implementation of the SCT through the technical working groups.
A Single Customs Territory (SCT) is a stage towards the full attainment of the Customs Union and is achievable by: the removal of restrictive regulations and / or minimization of internal border controls on goods moving between the Partner States with an ultimate realization of free circulation of goods.
SCT shall be guided by the fundamental operational principles of the EAC under articles 6 and 7 of the Treaty. Some of its objectives include: To ensure seamless flow of goods thus enhancing intra EAC trade; Lowering clearance costs of goods within the region; Shifting from physical controls to electronic clearance processes; Enhance coordination between agencies responsible for clearance of goods and to offer supportive institutional and legal framework.
It is anticipated that the SCT will: Reduce the cost of doing business by eliminating duplication of processes; Administrative costs and regulatory requirements; The risks associated with non-compliance on the transit of goods; Enhance trade in locally produced goods particularly agricultural goods ; Prevent smuggling at a regional level amongst others. According to estimates computed using indicators of World Bank Trading across borders Doing Business 2014 it is expected that clearance time will reduce from 18 to 4 days for Kampala and from 21 to 6 days for Kigali cargo when the SCT is implemented.
The SCT will operate as follows: Goods imported into the Customs Union shall be entered only once in the country of destination and released at the first port of entry to the destination Partner State ; Duty paid goods shall not change destination into another Partner State except where permission is granted by both Partner State; Duty paid goods released to the destination Partner State for home use shall be subjected to customs control through the Electronic Cargo Tracking System (ECTS).
KRA said it has conducted 2 joint sensitizations meetings in Mombasa and Nairobi with transporters, Clearing agents, freight forwarders, Port Authorities, manufacturers, importers from various sectors and shipping lines representatives to sensitize them on SCT. Press conferences, brochures and articles have also been published to this effect.
Industrialists also urged KRA to ensure the KRA officers on the ground have adequate information regarding the KRA products and systems, how they ought to work and should also provide a flow chart for export under SCT process. Proper communication channels will need to be put in place. This should be coupled with adequate personnel to address manufacturers’ queries adequately whenever members contact KRA.
KRA informed the meeting of the on-going discussions for consolidation of cargo to be done at the Inland Container Depot (ICD). They also reiterated that there is a monthly stakeholders meeting to discuss challenges faced by members under SCT and urged KAM members to send clear issues to KAM to be addressed during these meetings.
KAM represents 800 members in the manufacturing industry and the manufacturers arguably contribute about a quarter of the country’s gross domestic product. Over a million people are employed in the sector and millions others are supported in downstream activities.
The manufacturing sector is the country’s backbone and if this sector is not well supported the country stands to lose a lot of revenue and millions of jobs may also be at stake.
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