New customs system goes live on October 25

All cargo imports will be declared on a centralised tax system starting next week, the Kenya Revenue Authority (KRA) said, in a move expected to tighten the net on cheats and quicken customs clearance.

The taxman currently clears import cargo using separate electronic platforms, mainly the upgrades on its Simba customs management systems introduced in 2005.

The separate systems include direct assessment, valuation system, customs oil stock information, cargo management information system, electronic cargo tracking systems, customs ledger management module, air passenger service charge and real time monitoring system.

KRA Commissioner for Customs and Border Control, Julius Musyoki said all cargo clearance would be gradually moved to an Integrated Customs Management System (iCMS) starting next week.

“Please ensure compliance to avoid undue inconvenience” he said in a notice to importers.

A schedule released by the KRA on Monday showed that all applications for import declaration fees (IDF) will from October 25,2017 be submitted and processed on the iCMS similar to all air cargo manifests and customs declarations for cargo arriving on or after November 6,2017.

“All Sea Cargo Manifest and Customs Declarations for sea/ road cargo arriving on or after 13th November, 2017 shall be submitted and processed on iCMS,” the taxman further said.

The iCMS will replace the Simba system which has been blamed for revenue leaks and delays in customs clearance.

TradeMark East Africa that co-financed the iCMS estimates that it would lead to a reduction of cargo clearance time by about 60 per cent.

“Other gains include pre-lodgement of more than 80 per cent of customs documents; linkages with the National Single Window System to reduce complexity for traders in obtaining official approvals, and streamlining of processes between Kenya and other revenue authorities in the region” it further said.

Kenya currently lacks an integrated customs management system aligned with those used by other East African Community (EAC). The iCMS is expected to provide an efficient interface with the customs management systems of the EAC neighbours.

In a bid to seal revenue leaks and dumping of cargo, EAC partners in 2014 adopted a single customs territory system (SCT) — which allows for joint collection of customs taxes.

Under the SCT deal, clearing agents within the EAC have been granted rights to relocate and carry out their duties in any of the partner states as part of a scheme to improve the flow of goods and curb dumping.

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

READ: Integrated customs system game-changer in clearance of goods

The EAC partners have also adopted electronic tracking of cargo to facilitate seamless monitoring of goods on the various transport corridors in order to beat tax cheats.

Kenya, Uganda and Rwanda have a common cargo tracking system which comprises satellites, a central monitoring centre and special electronic seals fitted on cargo containers and trucks. It gives the specific location of goods in real time.

The system activates an alarm whenever there is diversion from the designated route, a strangely long stopover or when someone attempts to open a container.

Besides curbing theft of cargo, the system also helps to seal loopholes that cause the country losses in revenue through suspected under-declaration of the value of exports or theft of cargo.

Tanzania and Burundi are not part of the cargo tracking system operated by Kenya, Rwanda and Uganda.

Traders in the region have lobbied for uniform cargo tracking system for the EAC.