Kenya,Uganda set for joint vehicle tax scheme in April

Second hand cars at Mombasa port after being offloaded from a cargo ship. Vehicle and bulky steel imports will be cleared under a joint EAC tax collection scheme from next month. PHOTO | FILE 

By ALLAN ODHIAMBO
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Motor vehicle and bulk steel imports destined for Uganda through Mombasa port will from April be cleared under a regional joint tax collection scheme, adding to a long list of key goods already being handled under the platform by the two countries.

Kenya Revenue Authority (KRA) commissioner of customs and border control Julius Musyoki said bulk steel products and motor vehicles headed for the Ugandan market would be cleared under the Single Customs Territory (SCT) system starting April 1 and April 8, respectively.

“Kenya Revenue Authority will sensitise the relevant stakeholders ahead of the roll out,” he said.

The SCT system that began in 2014 allows joint collection of custom taxes by the East African Community (EAC) partners to boost collections and tame dumping of goods.

Kenya, Rwanda and Uganda were the first to take up the SCT arrangement on phased-pattern starting April 1, 2014 with Tanzania joining the scheme two months later. The system is expected to be fully implemented by June 2016.

Importers of commodities covered under the SCT are required to lodge import declaration forms in their home country and pay the relevant taxes to facilitate the export process.

The tax authorities in the respective countries then issue a road manifest against the import documents submitted electronically by the revenue authority of the importing country.

Kenya and Uganda already trade sensitive products such as sugar, petroleum, cement and tobacco under the SCT, dealing a blow to cartels involved in dumping of the commodities in the regional markets.

Several other goods including edible oils, confectionery and milk are also currently traded between Kenya, Uganda and Rwanda under the SCT platform.

Kenya and Tanzania have also recently expanded the list of items traded between them under the SCT system, raising hope for improved flow of goods and reduced dumping.

The joint tax collection system is already bearing fruit for traders in the region with analysts saying the merchants are saving up to $300 (Sh30,600) through more efficient joint clearance of cargo by EAC partner states at the Mombasa port.

An audit also showed that cargo clearance time at the port has dropped to an average of four-six days, from 18-22 days in 2013.

“Customs documentation requirements have been reduced by over 50 per cent in that one single customs entry and one customs agent is required to clear goods right from the Mombasa port or Dar-es-Salaam to the Ugandan destination,” the Uganda Revenue Authority (URA) revealed in a performance update.

“Transporters can now make three round trips per month (Mombasa-Kampala) instead of the one roundtrip in 2013, and over six trips/month for goods loaded from Kisumu, Eldoret and Nakuru.”

Trucks used in the SCT system are required to be fitted with electronic cargo tracking system (ECTS) to assist with surveillance. A joint real-time transit cargo monitoring scheme by Kenya, Uganda and Rwanda is scheduled to kick off by June to help curb dumping and theft of goods