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The East African : Jun 28th 2015
The EastAfrican BUSINESS JUNE 27 - JULY 3, 2015 TIME TO GET INTO SINGLE CUSTOMS TERRITORY 35 Mombasa to clea≥ goods elect≥onically By CHRISTABEL LIGAMI Special Correspondent CARGO CLEARANCE at the port of Mombasa will be fully automated from July 1. The Kenya National Treasury has notified all importers, exporters, clearing and forwarding agents and other users of the Kenya single electronic window system (Kenya TradeNet) that piloting of documents set out in the electronic system has been completed and they are ready for full processing. The move is expected to Merging the goods clearance systems of the three countries will ease movement of cargo . Picture: File Tax bodies to merge Customs clearing systems by end of June A functional Single Customs Te≥≥ito≥y in the ≥egion would ≥educe p≥otectionist tendencies By DICTA ASIIMWE Special Correspondent T he revenue authorities of Rwanda, Kenya and Uganda are required to have complete integration of their Customs systems before the end of June, to enable them fully to roll out the Single Customs Territory. A fully functional Customs territory would make it easier to clear goods and reduce protectionist tendencies. Doris Akol, Uganda Rev- enue Authority administrator general, says that the problems raised by players in the logistics sector can be solved through merging of the three countries’ revenue systems. Although both the Uganda and Rwanda revenue authorities use Asycuda World, while Kenya uses Simba to keep track of Customs transactions, the three countries’ officials are yet to begin talking to each other. Merging of Customs sys- tems will make it possible for the three countries to have a regional bond for goods in transit, instead of just having to choose between the Comesa one, which is considered expensive by players in the logistics sector, and the national ones, which are considered inefficient. Merging of systems would also improve the performance of the SCT, which players in the region now say is performing at just 5 per cent. Launched in October 2013, the Single Customs Territory was supposed to create a seamless flow of goods, lower costs of clearing, digitise clearance systems and improve co-ordination between the three agencies. Having an SCT has re- duced the transport time for goods from Mombasa to Kigali eight days from 21, and to Kampala from 18 to five. Information from TradeMark East Africa also shows that tax collection improved as a result of the SCT. But Jennifer Mwijukye, managing director of Unifrieght Cargo Handling Ltd, said that the benefits of the SCT have been limited by gross underperformance. She estimated the perform- ance at just about 5 per cent, attributed to the limitation on warehousing options and the fact that only a few goods are cleared under this arrangement. “When the SCT was KRA officials are accused of denying Ugandan clearing and forwarding agents access to their system when clearing goods under SCT. Yet at least 600 Kenyan clearing and forwarding agents have access to the URA Asycuda World system. launched, we were promised that new goods would be introduced on the list every two months but this hasn’t happened,” she said. Goods cleared by the rev- enue authorities of Rwanda, Kenya and Uganda under the SCT include clinker, edible oils, wheat grain, rice, cigarettes, neutral spirits and petroleum. Merian Sebunya, president of the Federation of East African Freight Forwarders, also lamented the lack of a regional bond, unfavourable competition practices by Kenya’s Revenue Authority and the fact that clearing is done at two borders. Ms Mwijukye said that rev- enue agencies of landlocked partner states want to clear goods from the port of entry. After this, clearing and forwarding agents are required to move goods to a warehouse in the destination country. “The ideal situation should be that any warehouse within the SCT area can be used. One should be able to pay tax or warehouse the commodities in a country of their choice,” she said. Goods heading to the hin- terland also require clearing more than once. Goods head- ACCUSATIONS AGAINST KENYA Kenya is also accused of refusing to use an electronic cargo tracking system that was purchased by TradeMark East Africa to help reduce opportunities of dumping goods into the Kenyan market. ing to Uganda are for example required to be cleared at both Mombasa port and Malaba border. Sam Watasa a former non-tariff barriers consultant with Uganda’s Ministry of Trade and Co-operatives says that the ideal situation should be that goods are cleared once, since arrival at Mombasa under a SCT is the same as reaching the destination country. Ms Sebunya added that the process of clearing goods has not become as seamless as had been expected. She accused KRA officials denying Ugandan clearing and forwarding agents access to their system when clearing goods under SCT. Yet at least 600 Kenyan clearing and forwarding agents have access to the URA Asycuda World system. Importers from Rwanda are allowed into the Kenyan system, but this group mostly uses the Central Corridor and therefore the impact of this is minimal on progress of the SCT. KRA is also accused of re- fusing to use an electronic cargo tracking system that was purchased by TradeMark East Africa to help reduce opportunities of dumping goods into the Kenya market. Mr Watasa said refusal to use a system that would create transparency either means officials at KRA are benefiting from the opaqueness or that the institution itself benefits. Attempts to get KRA offi- cials to comment on these accusations proved futile. Clearing of goods electronically will ease congestion at the port of Mombasa. Picture: File expedite information flow between traders and government institutions, and make the clearing process seamless, while increasing efficiency. Traders will now sub- mit all cargo clearance documents electronically through the Kenya TradeNet system for 150m ess goods through Customs at the port by half — from seven to three days. It will also enhance trans- parency, accountability and competitiveness while at the same time improving revenue collection. At the country’s airports, cargo clearance time will fall to just one day from the current five days and at borders, cargo clearance is expected to take one hour instead of two days, sponsors of the $18 million project said. Kenya is the second country in East Africa after Rwanda to roll out the single electronic window system. Kigali launched its automated Customs online service in August 2012, aimed at reducing the cost and time of doing business with its East African counterparts. Uganda, on the other The estimate amount that the system of clearance will save the Kenyan economy processing and approval by various government agencies such as the Kenya Revenue Authority, Kenya Ports Authority, Kenya Plant Health Inspectorate Services, Pharmacy and Poisons Board, the Kenya Shippers Council and the Kenya Bureau of Standards. They will also be able to apply electronically for permits, licences, certificates, make payments and get approvals from the more than 25 government departments and agencies using the system. When fully operational- ised, the system will eliminate or reduce the cumbersome paperwork which in turn is expected to reduce the time it takes to proc- hand, has a business licensing portal project whose aim is to ease the cost of doing business in the country. The E-registry is expected to enable investors to identify and obtain licences online. In Tanzania, plans are underway to have a national single electronic window by the third quarter of 2015 if all goes to plan. Kentrade, which is im- plementing the project, started trials in October 2013 to help traders access and pay for pre-clearance documents like impending arrival reports, import declaration forms and import/ export permits online. It is estimated that the resulting annual savings for the Kenyan economy during the first three years of its operation will range between $150 million and $250 million. This will increase to be- tween $300 million and $358 million annually in subsequent years.
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