Now Busia blames low revenues on EA protocol

Busia Governor Sospeter Ojaamong. FILE PHOTO | NMG 

By GAITANO PESSA

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Summary

• Governor Sospeter Ojaamong says opening up of the One-Stop Border Post at Malaba and Busia crossings may have eased transactions, but it has also meant that his county gets lower collections.
• The county recorded a 32.7 per cent drop in local revenues in 2016/17, earning Sh200 million.

The demands of the East African Community Protocol are clipping the wings of Busia County government, reducing its revenue sources.

Governor Sospeter Ojaamong says opening up of the One-Stop Border Post at Malaba and Busia crossings may have eased transactions, but it has also meant that his county gets lower collections.

The county recorded a 32.7 per cent drop in local revenues in 2016/17, earning Sh200 million.

Mr Ojaamong attributed this to lower parking fees from trucks and lost revenue from clearing agents who have closed business.

“The East African Community Single Customs Territory means that clearance of goods shall be done for the destination country while the goods are at the first point of entry. This has led to thousands of clearing agents losing their jobs at the border points of Busia and Malaba,” the governor lamented.

“Business operations at the border have also been affected since the treaty bars trucks on transit from stopping at the Kenyan side of the border,” he said.

The One-Stop Border Post is an initiative of the five East African Community members: Kenya, Uganda, Rwanda, Tanzania and Burundi. It is part of the EAC Customs Union, where members strive to eliminate tariff barriers to facilitate trade.

In Kenya, the initiative has been implemented by the Kenya Revenue Authority and the Immigration Department, who have consolidated border control processes such as goods clearance from one country to another.

With the Customs Union coming into force in 2010, multiple weighbridges, police and customs checks were limited. In addition, the protocol introduced computerised clearance, electronic tracking and other innovations to ease movement of goods and people across borders.

But this has also led to changes in prices of goods and services, which the governor says has led to lower collections. The governor said lower taxes in Uganda had led to infiltration of cheaper products, reducing consumption of Kenyan goods.

He added that although goods produced in the region are not subjected to import duty when transferred to another partner state, they should be subjected to domestic taxes, where applicable, imposed on international trade upon arrival at internal borders.

The devolved unit now plans to maximise on hospital user fees, installation of a trailer park yard, motorcycle and bus parking fees and single business permit fees to shore up its dwindling revenue streams.

READ: EAC member states roll out single electronic passport

The sentiments were echoed by Mr Charles Achieng, a senior official at the Trade Information Desk in Busia, who said the procedures have greatly affected business at both Busia and Malaba border points where the majority of traders are directly or indirectly involved in processing and clearance of goods.

“The five components of the EAC Common Market Protocol — free movement of goods, people, services, labour, and right to establishment — are working. But the arrangement has only favoured our colleagues from Uganda. 

“The benefit of tax harmonisation procedures and elimination of nontariff barriers has not been fully achieved, with many traders facing unfair competition on cross border trade. The effects have been devastating. We have already lost over 1,000 jobs,” he said. 

However, Mr Achieng said the procedures have drastically reduced the time taken to obtain permits and have led to improved delivery time of cargo.