Taxman backs down after boycott threats over seized Ugandan cargo

Cargo at the Mombasa port. Top imports in the region remained motor vehicles and industrial products including steel. FILE PHOTO |   NATION MEDIA GROUP

In Summary

• According to Kampala traders’ chairman Everest Kayondo, by Wednesday, about 4,000 containers were being held at the port because of arbitrary taxes that the authority had introduced.
• Mr Mambembe, who is also the chairman of importers, warns that this unlawful practice is frustrating trade in the regional market and has made the port of Mombasa expensive, making it to lose business to other ports.

By MWAKERA MWAJEFA
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The Kenya Revenue Authority Saturday started releasing Uganda-bound goods that were being held at the port of Mombasa after a pre-pay tax dispute between the authority and traders.

Responding to questions by the Sunday Nation, revenue authority marketing and communication southern region manager Fatma Yusuf said the issue was resolved in Bujumbura, Burundi, when it came up at a meeting.

She said the commissioners of Customs of Kenya, Uganda and Rwanda met in Bujumbura on Friday and reached an agreement.

The Kenya Revenue Authority response was prompted by a boycott threat of the port of Mombasa by traders who had given the authority two weeks to unconditionally release the Uganda-bound cargo.

Business people under Kampala City Traders Association had given the ultimatum following after the Kenyan taxman told traders to pre-pay tax for all goods that dock at the port when making orders. Previously, traders have paid port fees and handling charges when collecting, reported Uganda’s The Monitor.

ARBITRARY TAXES

According to Kampala traders’ chairman Everest Kayondo, by Wednesday, about 4,000 containers were being held at the port because of arbitrary taxes that the authority had introduced. This, he added, was not only against the spirit of the East African Community integration, but also hurting Ugandan traders and the country’s economy.

“And for that, we are giving them two weeks (effective Thursday) to release all cargo bound for Uganda, for which all port charges and other logistical fees have been cleared, or else we relocate to the Dar es Salaam port,” he said.

In addition, the traders had also resolved that should their conditions not be met, they would put pressure on their government to block Kenyan products from entering the Uganda market.

The association’s spokesperson, Isa Ssekitto, also said they will write a formal letter to the governments of Uganda and Kenya to communicate the traders’ resolutions, as well as remind Kenya government to pay Ugandan traders Sh1.3 billion that they lost during the post-election violence of 2007/2008.

REJECTED TAX PAYMENT

Meanwhile, local and regional importers have rejected the payment of taxes using the Single Window Territory Customs Document on transit goods before they (goods) are released for the port of Mombasa.

A port user, Peter Mambembe, noted that the Single Window has no backing in law.

He argues that the Simba System of collecting revenue online was also introduced without any regulations, and it is therefore illegal to interface it with other online systems of the East African Community states.

Mr Mambembe, who is also the chairman of importers, warns that this unlawful practice is frustrating trade in the regional market and has made the port of Mombasa expensive, making it to lose business to other ports.

He cited the transfer of a motor vehicle unit from the port to a private Container Freight Station which costs an importer Sh2,500 while a 20 and 40-feet containers cost Sh15,000 and Sh20,000 respectively.

“But when an importer clears goods directly through the port, he or she pays nothing,” he said.

“In fact, it is impossible to lodge claim with the Kenya Ports Authority because the private entities are not regulated by the National Assembly