PUBLISHED ON October 3rd, 2014

Mombasa’s planned new cargo taxes anger state, shippers

Proposals by a local authority to impose new taxes on cargo at Kenya’s main port has drawn opposition from the Government and shippers, who say it will hike import prices and make the East African trade hub less competitive.

The Government, keen to ward off emerging competition from regional rivals, has been striving to improve efficiency at the Mombasa port, the congested gateway that serves Kenya and landlocked states such as South Sudan, Uganda and Rwanda.

Customs reforms and other steps have cut transit times and costs, but Government officials and shippers say such gains could be undermined if the local authority succeeds in imposing extra taxes using revenue-raising and other powers granted to Kenya’s regions under the 2010 Constitution.

New levies
The Government says it will oppose any move to add new levies but the case will test Nairobi’s ability to challenge local government decisions, if Mombasa County assembly votes as expected to approve the measures next week. “The county can pass the Bill if they wish, but the final say lies with the ministry,” said John Mosonik, the Transport and Infrastructure Principal Secretary.

“We are trying to improve the port and make it more efficient to attract more businessmen and revenue, and it would be unrealistic to even think of introducing new levies which would negate all these efforts,” he told Reuters.

Mombasa Governor Ali Hassan Joho, who backs the proposed legislation, has said the port should be managed by the Mombasa County authorities and not the national government, so that its revenues can be used to improve services in the bustling city.

The draft Bill on the new taxes includes proposals for a $60 fee for ships with a gross capacity of up to 1,000 tonnes and $300 for vessels of 30,000 tonnes or more.

Shipping firms would have to pay $20 per tonne of exports and $20 per tonne to clear imports.

Source: The Standard

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