• The new system takes effect from May 10
• Eldoret Airport has become increasingly popular with cargo flight
Kenya Revenue Authority is targeting non-compliant individuals and firms in export and import business.
In a notice, it announced the roll out the integrated Customs Management System (iCMS) at the three main international airports, a move it said will counter non-payment of custom tax and fasten air cargo clearance.
The new system takes effect from May 10 and targets airlines, shipping lines/agents, importers, exporters, clearing and forwarding, agents, ground handlers, consolidators, couriers, and any other parties related to cargo clearance.
The system will be available at Jomo Kenyatta International Airport, Moi International Airport and Eldoret International Airport which are the main import and export hubs for traders.
KRA is currently conducting iCMS training and user creation.
Eldoret Airport has become increasingly popular with cargo flights seeking to avoid long queues at the busy JKIA in Nairobi.
The system allows automatic upload of cargo import information to prevent falsification and exchange of information with iTax to counter non-compliant traders.
KRA will henceforth require submission of air cargo clearance documentation through the system including import declaration forms, air manifests, security bonds, air cargo declarations and exemptions as it does away with hard copy documentation.
Air manifest for imports and exports are to be provided before the flight takeoff.
In the notice, KRA also stated that all master airway bills, issued by airline on receipt of goods for freight, must include the courier or consolidator PIN to enable cargo deconsolidation process.
“Ground handlers or couriers are required to ensure their systems are ready to receive system to system custom release messages as manual releases will be discontinued,” it said.
The administrative policy is one of the measures the taxman is employing to help it bridge the tax revenue gap and meet its annual target.
In the current financial year ending June, KRA expects to collect Sh1.605 trillion. It is also targeting to collect at least Sh6.1 trillion in next three years.
However, in the Treasury’s budget policy statement 2019, KRA was only able to collect Sh633.7 billion, equivalent to 6.3 percent of GDP, in the five months to November 2018.
This was Sh43.3 billion less the Sh677 billion target.
The shortfall was attributed to income tax from corporations which recorded negative growth.
Kenya lost Sh91.5 billion in revenue through false pricing of imports and exports in 2013, according to Global Finance Integrity report 2018.
The revenue lost to import mis-declaration was Sh77.3 billion, with goods into the country being over-valued in order to shift money abroad or undervalued to evade VAT taxes.
Of this value composed of Sh32.6 billion in uncollected VAT tax, Sh23.1 billion in custom duties, and Sh21.5 billion in corporate income tax.