Shipping & Logistics

Taxman enhances electronic goods control to boost revenue

Cargo at the port of Mombasa. KRA aims to fully automate its goods clearance and cargo tracking systems within two years. PHOTO | FILE
Cargo at the port of Mombasa. KRA aims to fully automate its goods clearance and cargo tracking systems within two years. PHOTO | FILE 

The Kenya Revenue Authority aims to fully automate its goods clearance and cargo tracking systems within two years as part of a strategy to seal revenue loopholes.

The country losses substantial revenue through suspected under-declaration of the value of exports or theft of cargo at a time when the taxman is under pressure to meet collection targets.

KRA targets a 100 per cent coverage of goods under electronic control by 2017/2018 from a current baseline of 23 per cent, a strategic plan released last Friday by commissioner-general John Njiraini showed.

“We are keen on enabling business by leveraging technology to achieve full electronic service leading to enhanced operational efficiency and high customer satisfaction,” Mr Njiraini said.

Kenya introduced the Electronic Cargo Tracking System (ECTS) in July 2009 as it intensified its purge against dumping of transit goods in the local market.

The system was particularly set to monitor movement of goods between Mombasa port and Busia and Malaba border points through which goods enter the landlocked Great Lakes region.

The agency later brought on board export goods and all others under customs control as it broadened its scope to fight tax evasion.

All importers, exporters, clearing agents and transporters conveying goods under customs control were ordered to install the electronic tracking equipment, phasing out tamper-prone seals.

Upon the installation of the ECTS equipment, the then cumbersome practices of customs physical escort were phased out and the annual transit goods licence fees waived.

Uganda in February said it would extend its ECTS into Kenyan territory to curb theft and diversion of goods destined for its market through the port of Mombasa.

Uganda Revenue Authority said the two countries had struck a deal on the scheme to be implemented in a few months. The main transit routes to Uganda from the port of Mombasa have been mapped for coverage by the Internet-based tracking system.

“When all is done, goods destined for Uganda will be monitored all the way from Mombasa and Nairobi in Kenya up to their destinations in Uganda,” former URA commissioner for customs, Richard Kamajugo said.

The tracking system is already active in Uganda where it was launched in May 2014. It comprises satellites, a central monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time.

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

Kenya is a key gateway to the region with the port of Mombasa handling imports such as fuel and consumer goods for Uganda, Burundi, Rwanda, South Sudan, the Democratic Republic of Congo and Somalia, and exports of tea and coffee from the region.

In addition to customs, the system will also provide real time information on the location and status of the cargo to transporters and cargo owners or their agents as the goods are transported along the 1,200km journey from Mombasa to Kampala.