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KRA enhances facilitation to small traders, allows consolidated goods

In Summary

• Multi-agency team of Kenya Revenue Authority, Kenya Bureau of Standards and Kenya Ports Authority has now made it mandatory for any consolidator to be registered in Kenya.

• The consolidators must also be tax compliant in Kenya.

KRA Commissioner General James Mburu
KRA Commissioner General James Mburu
Image: Courtesy

The Kenya Revenue Authority has proposed new rules to be followed by importers of consolidated goods as part of efforts to meet tax demands.

The authority on Friday said the move is aimed at addressing complaints by some importers who have been using brokers who acted as consolidators in various foreign countries.

In a statement, the taxman said a multi-agency team of Kenya Revenue Authority, Kenya Bureau of Standards and Kenya Ports Authority has now made it mandatory for any consolidator to be registered in Kenya.

The statement signed by Commissioner General Githii Mburu indicated that all consolidators must also have a physical store or office where he or she operates from.

According to KRA, the consolidators must also be tax compliant in Kenya.

Mburu said, as a result, the authority will upload a list of all registered consolidators.

“This is aimed at addressing complaints by some small-scale traders who do not know who they are dealing with when it comes to consolidation and importation of goods,” he said.

President Uhuru Kenyatta had in May directed the agency to come up with a formula to address the concerns of the small-scale traders.

This is after the traders met the president and complained the government was holding their goods over tax issues and hence they incurred losses.

It emerged 702 containers belonging to the small-scale traders were by May 27 2019, being held by different agencies over issues including the owners not knowing the consolidators.

But Mburu said KRA has so far cleared more than 500 containers and the owners had picked them up.

“The about 100 remaining are because of various issues including the owners not knowing the consolidators and lack of finances to pay the requisite taxes but we are working to help them,"  he said.

Mburu said the traders were granted waivers of all accrued storage charges, customs warehouse rent and any nontax charges by KPA,KRA or any other government agency.

He said there is no backlog of the containers.

"Most small-scale traders import their goods through consolidation. They use an agency in a foreign country to collect and consolidate their goods before they are shipped to Kenya," Mburu said in the statement.

He said this has however proved difficult for KRA to impose taxes on the goods as they belong to different people.

This has forced the taxman to physically inspect the goods for tax issues.

But to address the delays, Mburu said the authority will now be dealing with the registered consolidators.

“We are here to help everyone doing genuine business,” Mburu said.