Treasury puts cargo stations control directive on hold

Kenya Ports Authority (KPA) managing director Gichiri Ndua (centre). PHOTO | FILE |  NATION MEDIA GROUP

By ALLAN ODHIAMBO

In Summary

• Strict monitoring and surveillance of cargo movement into and out of the CFSs will be exercised.

The Kenya Ports Authority (KPA) has retained the right to intervene and re-direct suspect cargo consignments to any private holding station despite a move by the Treasury to defer the implementation of the controversial directive aimed at curbing revenue leaks at such facilities.

A directive by the Treasury early this month bestowed on KPA the sole mandate of determining which freight containers would be held at the various container freight stations(CFSs) awaiting shipment, starting December 1.

Currently, shipping agents are free to choose where to direct their cargo awaiting shipment.

The implementation of the directive was, however, deferred last week following talks between cargo handlers and Treasury secretary Henry Rotich in Nairobi.

“The foregoing prompted a debate that culminated in widespread stakeholder engagements and consultations. Consequently, it has been deemed desirable to, for the time being, defer the implementation of the aforementioned directive from December 1, 2015 pending comprehensive review of documentation,” KPA managing director Gichiri Ndua said.

“However, concerned authorities reserve the right to intervene and direct a given consignment to any qualifying CFS without prior notification,” he added.

The MD said strict monitoring and surveillance of cargo movement into and out of the CFSs will be exercised and information emanating there from employed in determination of immediate and future operations of the concerned CFSs.

“Following well-founded concerns regarding possible avenues through which tax revenues could leak, it was felt necessary to issue policy directions on nomination of imported domestic containers. This required all domestic import containers be manifested at the port. Subsequently, the KPA in consultation with the KRA will effect nomination of any of the qualified CFSs” Mr Ndua said.

The government is battling to seal revenue leaks in cargo handling amid claims that some industry players were colluding with importers to dodge duty.

The taxman is under pressure to improve its collection. Tax revenues have fallen below targets in the first three months of the fiscal year from July, plunging the Treasury into a cash crisis that left many government workers without pay and disrupted budget plans.

The KRA collected Sh152.7 billion in the first two months of the financial year, an amount that Mr Rotich said was unsatisfactory.
Overall, Kenya collected Sh182 billion in total revenues, including domestic borrowing and foreign loans in the two months.

That was way below the Sh210 billion that was collected in the first two months of the previous financial year.

As part of a strategy to seal loopholes in cargo handling, the KRA plans to upgrade cargo scanners in all the main ports of entry and install more.

The existing scanners, the taxman said, would be upgraded to provide sharper image quality and boost their speed and detection capabilities.

“You will be required to establish a modernised customs management solution having a centralised supervision system with multi-functionalities to realise centralised status monitoring of scanning operations, auditing onsite operation and data mining,” John Njiraini, the KRA commissioner general, said as he invited bids.