10 September 2012

Kenya: Car Importers Slam KRA Transit Vehicles Rule

A requirement by the Kenya Revenue Authority demanding that all imported transit vehicles above 2000cc be cleared against cash bonds or bank guarantees has been opposed by clearing agents in Mombasa.

The agents, under their umbrella Kenya International Freight and Warehousing Association, have threatened not to pay taxes if the regulations are not withdrawn by the tax collector.

The agents said that the stringent measures by KRA may stifle trade in the region and may also see the port of Mombasa losing some foreign importers to the port of Dar es Salaam in Tanzania. "We as clearing agents cannot pay the bonds for the importers. Make arrangements so that the money is paid by importers from their respective countries," said Boaz Makomere, Kifwa's national secretary general.

"If this move is implemented, then trade in the region and particularly Kenya is going to be affected completely." Makomere added that efforts by Kifwa officials to consult over the matter with the commissioner of customs at KRA were thwarted after all the association's proposals to have the rules changed were turned down.

"We were later informed that the commissioner rejected all our proposals and was adamant that the status quo remains," Makomere added. Kifwa chairman Awiti Bolo added that they will paralyze port operations if the two organisations, KRA and Kenya Ports Authority did not reconsider their move. He also threatened that the association will move to court to contest the decision. "We will explore all the avenues possible including going to court," Awiti said.

On August 31, KRA directed all clearing agents that with effect from September 1, all transit vehicles exceeding 2000cc would be cleared against a cash bond or bank guarantees paid by the agents. The forwarders also said that Uganda, Rwanda and DR Congo business class was considering ditching Kenya as an import avenue for Dar es Salaam port.

Amongst other demands that Kifwa wants addressed by KRA include the issue of dumping transit goods into the Kenyan market. "We have information that more than 200 units of transit units with bonds worth over Sh158 million had been dumped in Kenya in the last 3 months."

There is also massive influx of sugar imported from Uganda to Kenya which raises suspicion since Uganda also imports the same commodity. We want a legitimate trade pattern, Awiti added. When The Star reached KRA to comment over the matter, southern regional marketing and communication senior deputy commissioner Fatma Yusuf said: "The matter is receiving the attention of our head office and we shall be advised accordingly."

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