Business Daily (Nairobi)
Zeddy Sambu
11 March 2008
opinion
Traders have backed the recently introduced East African Community transit permit regulations, saying they are helping curb cases of diversion and dumping of transit goods into the local market.
The Kenya Shippers Council, the umbrella body for cargo importers and exporters in the region say a smooth flow of goods to landlocked countries will help realise high revenues for their businesses.
"There are many transporters who cannot be trusted with cargo due to the various cases of reported diversions," said Gilbert Lang'at, the organisation's chief executive.
Mr Charles Munyori, the Kenya Auto Bazaar Association said many transit vehicles were previously being diverted to the local market.
"Goods that are mainly dumped are untaxed," Mr Munyori said.
The new rules were introduced on February 29.
KRA's new rules require every transporter to register for a Company Transit Licence at Sh100,500 ($1 500), Transit goods Licence fee of Sh42,000 ($600) , and an increase from the previous amount of Sh10 000. The transporters are further required to execute a security bond of Sh10 million for goods in transit.
Porous border points, however, continue to pose a challenge in checking the diversion of transit cargo as well as rampant smuggling between countries in the region.
A number of regional initiatives have been mooted to address the challenge.
Already, one-stop border operations, such as the joint verification activities have begun at the Kenya-Uganda border town of Malaba.
Two years ago, KRA along with the Uganda Revenue Authority allowed for information sharing between the Uganda's ASYCUDA++ and KRA's Simba 2005 systems as part of effort towards trade facilitation and enhancing security of cargo and passenger traffic using the Mombasa-Malaba highway.
In 2007, KRA's customs department began a detailed investigative review of documentation to establish which containers were lost in the recent past and follow up with the port operators and importers.
There have been reports of piracy along the Indian Ocean trade routes just off the Kenyan coastline, meaning there is need for further action on how to control the movement of trade goods from the Kilindini Port in Mombasa to their final destination hinterland.
But critics of KRA's latest move include the Kenya Transporters Association (KTA) say the new rules will push transport costs up by more than five times.
"We see it as double taxation and does not also facilitate trade on the northern corridor . Such a move is likely to render trucks' companies uncompetitive," said Eunice Mwanyolo, who is the chief executive for the KTA.
Other insiders say the move is likely to take a toll on efforts to decongest the Mombasa port as compliant trucks can only be allowed to operate.
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