Taxman’s vetting tears clearing and forwarding agents down the middle

Cracks have emerged within the clearing and forwarding fraternity as the taxman deepens the screening of agents in a raft of measures introduced last year to curb evasion of customs taxes.

Officials of Kenya International Warehousing Association (Kifwa), the agents’ lobby, have dismissed a national strike called by a splinter group to force the Kenya Revenue Authority (KRA) to stop compiling confidential information.

A section of Kifwa, led by Keynote Logistics managing director William Ojonyo, has locked horns with KRA over the requirement to have all agents sign documents called stakeholder bio data forms.

The agents argue that their constitutional rights were violated when the taxman introduced the forms last year without consultation.

The agents handle Kenya’s international trade which crossed the Sh2 trillion mark for the second time at the end of 2015 with an imports bill of Sh1.577 trillion and Sh581 billion worth of exports.

The group had called for a national strike saying its members would neither collect cargo from Mombasa port nor make tax payments until their grievances were addressed.

It has also petitioned the Treasury to block the KRA from suspending their trading licences.

But Kifwa national vice chairman Eric Gitonga disowned the petition, saying the association had not asked its members to down tools, adding that issues raised with KRA were being handled “amicably”.

“We have not asked agents to go on strike and we urge them to continue collecting revenue as normal,” Mr Gitonga said.

“There have been issues regarding renewal of our licences but we have discussed this with the KRA commissioner general who extended the deadline to April and there is no controversy over the matter.” In his petition to the Treasury, Mr Ojonyo has claimed that there is a scheme by KRA to use the data collected to reduce the number of agents to 200, shutting out over 1,000 others from the lucrative business.

Yesterday, the KRA ruled out suspending its data collection saying up to 90 per cent of the agents had already submitted their personal information.

In a statement to newsrooms, Commissioner General John Njiraini said the exercise was being implemented “with objectivity and due regard to fairness.”

“Given the criticality of their services in safeguarding national security and public revenue, it is imperative that persons entrusted with this role exhibit the highest standards of ethical and business conduct,” Mr Njiraini said.

Resolved to collaborate

“The ongoing initiative to evaluate applicant suitability is meant to achieve this objective prior to the renewal of licences”.

This is not the first time the split within Kifwa is playing out since the taxman launched the screening effort.
In December last year, Mr Ojonyo accused national chairman Auni Bhaiji of colluding with KRA and big companies to kick small rivals out of business.

He was reacting to a joint public notice published by Kifwa and KRA saying they had resolved to collaborate “with a view to achieving greater efficiency in the cargo clearance process by streamlining of valuation dispute resolution mechanisms and strengthening of agents’ licensing procedures.”

Mr Bhaiji however defended his action saying they were trying to streamline operations in a sector that had been infiltrated by quacks who he said had tainted the image of the business.