The qualms that had earlier arisen over Tanzania’s commitment towards the achievement of an East African Community are seemingly put aside following reports that the country has joined the Single Customs Territory (SCT).
As a result, a new word, ‘Coalition of the willing’ in reference to the three countries was coined.
In a press statement issued by Vedastian Justinian, the Head of Communication at Tanzania’s Government Information Services Offices, the projects under deliberation by the ‘new coalition’ should have been endorsed first by all the EAC member countries.
“This is notwithstanding the fact that the coalition of the three countries in exclusion of Tanzania and Burundi is being run under their respective foreign affairs dockets and not through the EAC secretariat,” the official is quoted by the media.
According to the statement, the official claimed that the Kenyan, Rwandan and Ugandan leaders were in contravention of Article 7(1) (e) of the EAC protocol.
“Even though this Article allows member countries to enter bi-lateral or tri-lateral agreements, it is a must that issues under consideration for implementation under this arrangement are fully discussed and agreed upon by all member countries,” read the reports.
According to Richard Kamajugo, the Commissioner Customs at Uganda Revenue Authority (URA) , all preparations including upgrade of IT infrastructure is being fast-tracked to ensure a smooth implementation of the SCT with Tanzania and Burundi.
“We have completed drafting the necessary documentation, upgrade of information technology systems and ensuring interfaces with other sister revenue authorities and ports in Dar-es-Salaam perform as expected,” he said in a press statement seen by this paper.
He adds that sensitization of the companies dealing in some of the selected items and their clearing agents are being carried out in preparation for the pilot so as to guide them on using a single entry.
Just like the case was in the earlier implementation between Uganda, Kenya and Rwanda where fuel was listed among the items running under the SCT clearance processes, the pilot with Tanzania commences this week (June 2, 2014).
Kamajugo says that the pilot will cover selected exports from Uganda to Tanzania such as cooking oil, soap, mineral water, cosmetics as well as selected exporters like Bidco (U) Limited, Mukwano Industries and Movit Products Limited.
The implementation of the Single Customs Territory (SCT) system between Uganda, Kenya and Rwanda has substantially reduced business costs according to customers since its implementation commenced in earnest in February 2014. This is largely due to the new cargo clearance procedures and integrating ICT systems of the Revenue Authorities in the region.
Under the SCT clearance procedures, customs declarations are made electronically and the manifests processed and released by Customs in the country of importation prior to loading of goods for export from the country of export. Taxes are determined and paid in the destination country.
According to URA, the roll out of the SCT will reduce cargo clearance delays, reduce clearance costs, eliminate multiple customs declarations and bond securities, ensure a seamless flow of goods and ultimately reduce the cost of doing business in the region.
This, coupled with removal of roadblocks and weighbridges lead to reduction in transit time- the time cargo takes to reach its destination.
For instance, in the case of Mombasa to Kampala, transit days have since reduced from 18 to four days. This has ensured a faster turnaround for trucks and a higher return on investment for transporters.
The elimination of multiple Customs (insurance) bonds – for goods in transit, a bond is executed to guarantee the taxes that would have been paid if the goods were to be consumed in Uganda. The amount of a bond is equivalent to the tax one would have paid if the goods were sold in a given country. Cargo coming to Uganda had to be bonded from Mombasa and in Uganda if it was destined to Congo.
Based on the 2012 URA report on the volumes of cargo, the cost of bonds was estimated at $43m for containers leaving Mombasa for Kampala.
Multiple bonding is now history as importers will utilize one regional bond.
Tanzania’s entry will further expedite trade facilitation in the region and grow East Africa into the economic power base that the leaders in the region envisaged with the launch of the SCT.
Source: East African Business Week
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