PUBLISHED ON September 29th, 2014

Mombasa to tax goods imported through port

THE Mombasa county government has flexed its muscle by trying to control the stakes at the Kenya Ports Authority by introducing its own levies for all cargo passing through the facility.

In this year’s 2014/15 Finance Bill, the county government has proposed a Transport Infrastructure Development Levy of US$2 (Sh174) per metric ton to be remitted by all ships calling at the port.

The levies will be collected by Mombasa county through the port managers once the bill is ratified and implemented.

“Transport Infrastructure Development Levy of US$2 per metric ton or US$10 per shipment, whichever is higher, to be levied on all marine cargo through the harbours/port, to be collected through port managers,” reads part of the bill, which is still in its draft stages.

The bill has also introduced Port Health Fees and Charges for exports, imports, supervision and destruction of condemned goods, as well as the spraying and fumigation of vessels against vectors.

Port users will be required to pay US$20 (Sh1,740) per ton for Export permits and Import clearance respectively and shipping lines will have to pay $60 (Sh5,220) for vessel inspection each time they dock at the port.

The county argues that some vessels call into the country with diseases that must be controlled, and therefore the spraying of vessels against vectors will be $60 (Sh5,220) per square metre and fumigation will be $20 (Sh1, 740) per ton.

Mombasa County Trade executive Mohamed Abdi said all the shipping activities at the Mombasa port must be well- regulated for the county to also earn revenue.

“We are doing this for the benefit of the Mombasa residents and, also, if ships dock at the port and are not inspected against vectors, we might end up contracting diseases as a county,” he said.

He was speaking on Friday during the public participation session of the county finance bill at the Kenya School of Government in Kizingo, Mombasa.

The bill has also proposed that local ship’s chandlers supplies’ clearance fees will depend on the weight of the cargo being cleared.

Less than a ton, the chandlers will be paying Sh1,000 whilst for 2-5 tons they will pay between Sh2,000 and Sh5,000.

“Container verification charges will be US$40 (Sh3,480),” the new bill states.

This has already caused an uproar, with the Shippers’ Council of East Africa and Kenya Association of Manufactures saying that it will be double taxation, since there are other institutions in charge of regulation at the port.

Kenya Association of Manufactures’ Coast chapter vice-chair Jinal Shah, who was present during the public hearing at the KSG, said the move will lead to increases in the prices of imports and exports.

“We already have institutions that are in charge of revenue collection at the port. Taxation should be one-way because impositions of new port charges are not economically viable,” said Shah during the meeting.

Shippers Council of East Africa CEO Gilbert Langat yesterday opposed the new levies, saying they are unjustifiable and will increase the cost of doing business in the shipping sector.

“The cost of doing business in Kenya is already very high – by imposing such new levies, the county will lose business to the rival port in Tanzania,” said Langat.

He said the county government should cede the regulation and levy collection mandate to the national government and demand a certain percentage from the total revenue collected.

“We cannot have instances of everyone trying to regulate activities at the port. Let the county government agree with the national government that they will be getting a certain share from all the revenue collected,” he said.

Political observers said that the Mombasa government is trying to introduce charges at the port in an attempt to flex its muscle to try and control the facility’s operations.

Mombasa Governor Hassan Joho and Senator Hassan Omar have been in the forefront championing the devolution of the port facility to the county government.

Source URL: The Star

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