•KRA's cargo monitoring division stopped issuing 2020 ECTS certificates to the companies on the allegation they failed to monitor cargo resulting to losses.
•Electronic Cargo Tracking Systems Providers Association of Kenya says the taxman discontinued signing of ECTS certificates from around February 27, 2020, without formal communication.
Cargo tracking companies are up in arms against a decision by the Kenya Revenue Authority to discontinue signing of Electronic Cargo Tracking System (ECTS) certificates, which they say is hurting their businesses.
The eight companies have been providing real-time cargo tracking services since 2014, helping KRA and regional authorities to curb dumping and cargo diversion.
This is after KRA made it mandatory for all exports traded within Kenya, Uganda and Rwanda to be cleared under the Single Customs Territory (SCT) regime and only trucks fitted with the ECTS allowed to transport goods.
Through their association–Electronic Cargo Tracking Systems Providers Association of Kenya (EPAK), the companies say the taxman discontinued signing of ECTS certificates from around February 27, 2020, without formal communication.
This has jeopradised their businesses where they have cumulative investments of over Sh5 billion, employing more than 500 people, they say.
According to EPAK, failing to certify the companies has affected movement of cargo from Mombasa, with hundreds of containers lying at Container Freight Stations.
This comes with additional storage charges, demurrage costs and breach of contracts with transporters and customers.
“We would wish to point out that discontinuing the ceritificate process will greatly affect movement of cargo by transporters, clearing agents and other port stakeholders and also act as a hinderance to trade,”EPAK executive officer Flevia Gekone says in a letter to KRA.
The eight companies which have been tracking cargo on behalf of KRA are Automated Logistics, Borderless Tracking Ltd, I Spy Africa, Navisat Telematics, Oak & Gold Ltd, Rivercross Tracking Ltd, SGS Kenya and Track N Trace Ltd.
A correspondence between the taxman and EPAK indicates KRA's cargo monitoring division stopped issuing 2020 ECTS certificates to the companies on the allegation they failed to monitor cargo resulting to losses.
On March 9, 2020, six of the companies received a request by KRA for data on unaccounted for transit cargo, where they were given seven days to explain.
The vendors have however termed the move a “witch-hunt”, as two of the remaining ECTS providers have also been bared from submitting their certificates at KRA for processing.
"We are requesting the government to explain how cargo is lost yet the tracking system gives real time view of the cargo on the KRA platform and alerts are sent immediately whenever there is tampering," Gekone said.
EPAK says all data requested for was submitted to KRA by the March 16. The taxman also has access to all vendors systems, it notes.
“ KRA arbitrarily discontinued signing of ECTS certificates without giving us any formal communication on the same or reasons that informed their decision,” Gekone says in a complain letter to KRA.
“We are seeking a clarification on what informed the decision to abruptly discontinue the signature of ceritification,” she adds.
On March 13, KRA notified importers, transporters, customs agents, and other interested parties, conveying goods under customs control, that all containerized transit cargo and SCT foods from the port, and excisable goods will be tracked under the Regional Electronic Cargo Tracking System (RECTS) seals going forward.
All petroleum and ethanol tankers conveying transit and SCT cargo must be fitted with a RECTS Efuel by June 30.
“This is a free of charge service under the KRA RECTS initiative. Efuel installation will be scheduled on first come first served basis,” the taxman said in a notice.
This indicates KRA has taken up the tracking exercise where it has procured about 8,600 seals for use by cargo transporters and 4,000 seals for use by tankers transporting transit petroleum and ethanol, all which are currently in use.
The taxman monitors all truck movement through an Integrated Scanner Command Centre (ISCC) and the RECTS , all with a central command center at Times Tower, Nairobi.
The systems are linked to revenue authorities of Uganda and Rwanda, with response teams along the Northern Corridor responding to any alerts in the system in case of tampering of seals on trucks.
EPAK says while it appreciates that issues raised by the taxman be addressed, it should not affect the ECTS certificate process or hinder transporters who have complied from carrying on trade.