PUBLISHED ON July 25th, 2014


The importer in Kenya was required — prior to verification to apply for, process and forward to the PSI company an Import Declaration Form (IDF) — which acts as an import licence detailing the value of the goods to be imported and other descriptions. The form costs Sh5,000. On importation of the goods, a fee of 2.25 per cent of the value of the goods is currently payable (less the Kshs 5,000 paid in advance), excluding goods originating from within the EAC and duty exemption/remission goods or inputs.

This fee is not refundable and is considered to be a revenue source for the Government. In April 1998, the Government appointed M/s Swiss Procurement Company S.A (SWIPCO) to audit the work of PSI companies under a programme known as “Import Verification Programme for Kenya”. This programme required Swipco to establish an international price database for imports to Kenya based on this verification process and transfer the database to the Government at agreed intervals. The Government then was using the British Definition of Value (BDV) valuation technique which required use of researched values of goods to compute taxes and not invoice values which are currently in use.

Swipco services were terminated when the Government adopted the World Customs Organisation General Agreement on Trade and Tariffs (WCO GATT) valuation techniques which primarily use commercial invoices to determine value and taxes of goods imported. With the relief from fees and other related costs following Swipco, one would have expected that the Government would abolish collection of the extra 2.25 per cent of the value of the goods, retaining the Sh5,000 processing fee.

With effect from September 9, 2005, the Kenya Bureau of Standards (Kebs) implemented the “Pre-Export Verification of Conformity (PVoC) to Standards Programme” under which an overseas Exporter of goods to Kenya is required to have his documents checked and goods pre-verified for conformity against applicable Kebs standard before shipment from his country at his own expense. Shipments which are not covered by a Certificate of Conformity issued by overseas agent of Kebs attract a penalty of 15 per cent of value for local inspection.

Still an importer in Kenya is required to prepare an IDF and forward it to the overseas exporter to enable PVoC to undertake the inspection. Since the PVoC is incurred by the overseas exporter and the importer’s Sh 5,000 for processing of the IDF, this is yet another reason why collection of the 2.25 per cent extra IDF fees by the Government should be discontinued. In December 2004, the East African Community Customs Union was formed between Kenya, Uganda and Tanzania and later Rwanda and Burundi.

One of the key objectives of the EAC customs union was to establish common Customs laws and regulations, to apply uniformly in the partner states. Whereas the 2.25 per cent IDF is applicable in Kenya and Tanzania (to a small extent), it is not applicable in Uganda and Rwanda. In the spirit of applying uniform customs laws (and duties) in the partner states, the 2.25 per cent IDF fee should be abolished. As we eagerly await the Cabinet Secretary of National Treasury’s reading of the budget tomorrow, it is my prayer that consideration is given to the IDF fee and that it will be abolished.

This will not only encourage greater volumes of imports but more prosperous businesses as a result of less taxes, lower final consumer prices and higher income taxes to Government as a result of higher business profits.

Source: The People

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