MP now want a revision on the value of personal items subjected to customs duty increased from the current $500 (Sh75, 000) to $10,000 (Sh1.5 million).
This is after Kenya Revenue Authority (KRA) moved to implement the East African Community Customs Management Act, 2004 that compels travellers into Kenya to pay customs for personal goods valued beyond the current set level.
KRA has instituted the directive that has seen travellers arriving into the country from international destinations to the Jomo Kenyatta International Airport with personal items like worth USD500 and above, which is equivalent to Sh75, 000 taxed.
However, the MPs are now pushing for the revision of 19-year-old law saying that the amount is low since a lot has changed from the year 2004.
This essentially means that when the law was passed the Kenyan shilling was trading at an average of Sh79 against the dollar compared to the Sh151.55 against the greenback as at November 8, 2023.
According to the Finance and National Planning Committee chairman Kimani Kuria, KRA should fast-track the changes as to include some of goods that may have not been in the original Act in 2004.
“A lot has changed currently there is no proper provision on the state of the products that should attract these taxes. We will table a motion in parliament as we seek to instigate changes locally on what products exactly should be included in the tax band,” said Kuria who is the Molo MP.
Under the EAC regulation of 2004, some of the strategies that the regional tax collection agencies were required to comply with included the installation of non-intrusive scanners across all ports of entry to aid verification of goods.
This is meant to enhance compliance by ensuring that goods imported into the country are correctly declared not only for taxation purposes but also for the security purposes.
The taxman has indicated that plans are underway to review the law to increase the cap.
KRA Commissioner for Customs and Border Control Lillian Nyawanda, however said for the figure to be changed there is need for negotiations with the regional trade ministers.
Treasury will now need to reach out to the East African Council of ministers, who will present the amendment to the EAC commission.
“We have communicated to Treasury to reach out to its regional peers and see if the figure can be changed. Once we engage Treasury we now have to wait until EAC finance ministers issue the next directive,” said Nyawanda.
Despite the increased harassment claims, KRA said that the program has increased revenue collection.
In July, August, September, and October the taxman collected Sh51 million through the declarations at KRA.
According to data submitted to the finance committee customs department collected Sh8.1 million in July, Sh9.4 million in August, Sh14 million in September and Sh19.5 million in October.
The increased vigilance at the entry points has seen KRA Customs Department at the Jomo Kenyatta International Airport seize more consignments of restricted items being brought into the country.
According to the KRA, 132 prohibited items and 431 restricted items were confiscated in a total of 440 interceptions between July and October 2023. The restricted items included 14 sex toys, 58 shisha and shisha devices, 24 Viagra packs and 60 bleaching creams.