KRA, agents row slows down cargo flow at port
About 1,500 Mombasa clearing agents have been on a go-slow since October 31 over the KRA’s cargo valuation process
The standoff between the Kenya Revenue Authority and clearing agents over new cargo valuation process has slowed movement of cargo at the Port of Mombasa, hitting government revenues.
A meeting last Friday between the commissioner general John Njiraini and the Kenya International Freight and Warehousing Association failed to reach an agreement.
About 1,500 clearing agents affiliated to Kifwa have been on a go-slow since October 31, a move that has left more than 1,000 containers lying at the Port of Mombasa. This has led to losses running into more than Sh60 million. Kifwa yesterday said it is optimistic the taxman will review the new procedure in ongoing talks with clearing agents.
“We had stopped lodging documents since last week. We, however, sat down with the commissioner general (John Njiraini) and agreed on the way forward.
We agreed they follow the East Africa Community Customs Management Act and the World Trade Organisation schedule appropriately,” Kifwa national vice chairman Eric Gitonga told the Star on the phone yesterday.
He said though clearing agents have not fully resumed duty “there is sanity”.
Last Tuesday, KRA commissioner for customs and border control Julius Musyoki said the authority reviewed its cargo valuation process to curb tax cheats. “Importers have manipulated KRA systems which has led to an increase in undervaluation, mis-declaration and concealment of imported goods, including falsification of importation documents,” Musyoki told journalists in Nairobi.
The new system involves the use of transaction value, valuation using identical goods, and transaction value of similar goods. It replaces the old Kenya Revenue Authority Evaluation Formula, which mostly relied on declaration and documents presented by importers, which Kifwa prefers.
“There is no way you will buy something at $1,000 (Sh101,758) then told to pay $5,000 (Sh508,790). People want to pay taxes but we must have the right systems,” Gitonga said.
Sources said an agreement to revert to the old system has been put on hold.
Imported cars at the Port of Mombasa on April 30