The cost of importation is likely to dip substantially as the Kenya Revenue Authority (KRA) moves to handle up to 70 per cent of cargo under a new pre-arrival cargo clearance scheme.
A key benefit of the system is that it will spare importers storage charges both at the Port of entry and Container Freight Stations(CFSs).
Julius Musyoki, commissioner of customs and border control at KRA, said the new system would enable the customs department speed up cargo clearance, with the slow exercise often attributed to inspection at the port of Mombasa.
“Once the system is fully operational we hope to have 70 per cent of pre-arrival clearance of the total cargo coming through the port,” he said.
Besides presenting their cargo to inspection companies appointed by the government, exporters will also be required to present invoices for the cargo to the inspection firm for confirmation of value.
Once the certificate of conformity is issued by the inspecting firm the carrier is required to present it at the port of export before the cargo is loaded.
KRA will then be able to access the data base of the pre-shipment companies through the Kenya Bureau of Standards.
“When we do this we expect the rest of the people who remain non-compliant to be subjected to vetting and other interventions. It will be non-discriminative and wholly dependent on the importers’ track record and whether they have a history of non-compliance,” he said.
Mr Musyoki noted that the taxman had began engaging the shipping lines and agents over the new system to ensure full compliance.
“Compliant clients who have no issues and are adhering to the law will have their cargo moved from the ship to the truck and to their destinations smoothly. If need be, we will do post clearance,” he said.
KRA hopes to ensure clearance of Certificate of Conformity (CoC) compliant cargo within 24 hours of declaration, subject to the shippers fulfilling all other import formalities. The Kenya Bureau of Standards (Kebs) employs a similar scheme to enforce compliance of quality specifications on cargo destined for the country.
The regulator implemented the rule requiring all goods to be accompanied by a certificate of conformity in December last year to check the importation of substandard goods. The provisions of pre-export verification of conformity (PVoC) scheme requires all sea and air carries to ensure that their cargo is inspected and certified by appointed agents in the source markets.
Initially, the list of items and products covered under the scheme had a direct impact on the health and safety of Kenyans but Kebs expanded the list, exempting only raw materials for processing into finished products, spare parts for own use by manufacturers and customised machinery not meant for sale.
M/s Soci´vévt´é Générale De Surveillance SA (SGS), M/s Intertek International, Bureau Veritas and M/s China Certification & Inspection (Group) Co are Kenya’s pre-shipment inspection service providers.
Increasing cases of containers being unprocedurally removed from the port and mis-declaration through cartels has led to massive loss of revenue for the taxman and missed budget targets.
The taxman missed its full-year collection target in the last financial year, attributing the poor collection to a dip in payroll taxes and delayed application of the Excise Duty Act 2015.
The KRA has been implementing a series of custom reforms to curb tax evasion by importers besides plugging revenue leakages.
Mr Musyoki noted that the new customs staff at the port would be inducted to replace those that the taxman had reassigned to other posts and ensure more seamless clearance of goods.
In May, KRA suspended four Mombasa based customs official for allegedly aiding in tax evasion after seizing seven containers that had been cleared for release even before the vessel conveying them had docked at the port.
Intensified screening procedures on all cargo entering or leaving the country to easily identify narcotics and other illicit products at various ports of entry have also been implemented by Customs and Border Control.
Cargo scanners in all the main ports of entry are also being upgraded and additional ones installed to provide sharper image quality and boost their speed and detection capabilities.
