Times Tower. FILE PHOTO | NMG
Regional underwriter Kenindia Assurance has called for stiff
penalties for importers ignoring local marine insurance products in
favour of foreign covers for their consignments.
The
insurer says this has denied companies much-needed business and the
Treasury revenue. The firm pushed for firms using local marine insurance
cover to enjoy more tax incentives than those using foreign covers.
“Kenya
Revenue Authority has been reluctant to enforce penalties for importers
using foreign covers at a rate of 1.5 percent that could churn new
revenue for the government,” said General Insurance assistant manager
Joyce Mathenge.
Treasury Secretary Henry Rotich had in
2017 directed all importers to use local marine insurance for imported
goods, saying this could boost premiums as well as the capacity of local
insurers to handle big-ticket jobs.
Ms Mathenge said
the mandatory use of local marine insurance had helped grow their marine
cover uptake by 27 percent in the past two years.
She
said Kenya should consider lowering duty on marine insurance premiums to
enable local marine products to compete on an equal footing with
foreign underwriters.
“Perceived high premium rates due
to high stamp duty on imports by sea contributes about 30 percent of
total premium costs compared to the lowly priced international marine
insurance rates,” she said.
Ms Mathenge said Kenya
should also review trade agreements that allow suppliers’ a monopoly in
determining the marine cover that an importer takes under the Cost,
Insurance Freight model.
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