A Kenya Revenue Authority regulation demanding that all imported transit vehicles above 2,000cc be cleared against cash bonds or bank guarantees has put the authority and clearing agents on a collision.

The Kenya International Freight and Warehousing Association has threatened to boycott paying taxes if KRA does not withdraw the new regulations.

The agents said the stringent measures by KRA may stifle trade in the region as well as making the port of Mombasa lose its foreign importers to the port of Dar es Salam. "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," they said.

"If this move is implemented, then trade in the region and particularly Kenya is going to be affected completely, said Boaz Makomere, Kifwa national secretary. Makomere added that efforts by Kifwa officials to consult with the commissioner of customs at KRA over the matter were thwarted after the commissioner rejected the all their proposals to have the rule changed.

Kifwa chairman Awiti Bolo said they will paralyse port operations if the two organisations, KRA and Kenya Ports Authority, do not reconsider their move. They threatened to 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 communities are considering ditching Kenya as an import avenue. They threatened to move to the Dar es Salam port in Tanzania.

Among other demands 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," said Awiti.

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 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.