Cement, tobacco to be cleared under EAC tax deal

Cement and cigarettes will be the first goods to be cleared under a new trade deal allowing for joint collection of customs taxes by Kenya, Rwanda and Uganda.

Under the deal taking effect on April 1, clearing agents have been granted access rights to relocate and carry out their duties in any of the partner states under the single customs territory (SCT) system, raising hope for improved flow of goods and curbing dumping.

Kenya Revenue Authority (KRA) commissioner of customs service on Wednesday said the first phase will also cover neutral spirit.

“Effective April 1, importers and exporters of cigarettes, cement and neutral spirit originating from Kenya, Uganda and Rwanda for trade within the three countries shall have them cleared through the SCT system,” said Ms Memo.

Importers of these commodities will lodge the import declaration forms in their home country and pay relevant taxes first to facilitate the export process.

KRA will then issue a road manifest against the import documents submitted electronically by the revenue authority of the importing country.

Similarly, exporters of the commodities in Uganda and Rwanda to Kenya will require the importers to pay taxes to KRA before goods are released by the revenue authority of the exporting country.

“Thus only one declaration document shall be made in the clearance of these products within the region,” Ms Memo said. Local exports of these commodities from Kenya to Tanzania and Burundi and vice versa shall be handled as per the current export procedures until further notice.

READ: EAC market takes leap forward with single customs deal

The Kenya Association of Manufacturers (KAM) welcomed the commencement saying it was years late having been regularly postponed in the last decade.

“We urge KRA to create a ‘green channel’ where goods can pass with little checking apart from regular audits for compliance,” said KAM vice-chairman Pradeep Paunrana who is the CEO of listed ARM Cement.

“All dry cargo arriving at the port of Mombasa and petroleum products at Kenya Pipeline Company (KPC) station in Kisumu destined to the Republic of Rwanda shall be cleared under the SCT and not transit regime,” KRA added.

Petroleum products to Rwanda cleared at other KPC depots within the country will, however, continue to be declared under the transit regime until further notice, the tax agency said.

The EAC revenue authorities have agreed on granting access rights to clearing agents in Kenya, Uganda and Rwanda who have been trained on how to use the ASYCUDA and Simba systems to enable them clear and forward goods in any of the partner states.

Full implementation of the SCT is expected by June 30 Tanzania and Burundi will later join in.

Analysts said putting the revenue officials in one location will end trade diversion and reduce the disputes that have arisen out of products bilateral deals that member states sign with non-EAC states.