- According to traders, some supervisors detain containers to ostensibly conduct a personal verification which at times takes up to two weeks.
- The association argues that the delays mean an extra Sh200,000 in storage charges, a cost that is passed to importers.
Image: CHARLES MGHENYI
Traders at the port of Mombasa are appealing with the Kenya Revenue Authority to overhaul its investigation and enforcement processes for ease of operations.
The Kenya Freight Forwarders and Warehouse Association claims the Investigation and Enforcement office has been causing unnecessary delays that are costly to their work.
According to traders, some supervisors detain containers to ostensibly conduct a personal verification which at times takes up to two weeks.
The association argues that the delays mean an extra Sh200,000 in storage charges, a cost that is passed to importers.
"We have been incurring extra costs due to the detaining of our containers which have already been cleared by customs. One of the officers demands a bribe of Sh50,000 per container and failure to part with the cash, the container is detained for 15 days," its committee member Emerton Mwakina said.
Mwakina who is the general manager of Imani Logistics says over 40 of KIFWA members have complained to KRA but no action has been taken, while members continue to incur additional charges when their containers are irregularly held.
"We are appealing to KRA to consider overhauling the investigation and enforcement team. We have no problem with other offices. And as members, we comply with tax obligations as required by law," he said.
KRA recently began a new policy of opening containers to compute taxes per item instead of per kilogramme.
This already importers said has led to increment of cost of cargo with KIFWA saying any delay in releasing containers means another extra charge for traders.
Under the new policy by KR items, which ends up in open-air markets such as Gikomba and Nyamakima, now attract import duties, Value Added Taxes (VAT), excise duty, import declaration levy (IDL) and Railway Development Levy (RDL).
This has increased the cost of consolidated cargo, which at the moment attracts a duty of Sh200 per kilogramme for air cargo or Sh2.2 million for a 40-foot container brought in through the sea.
Small traders could now start paying import duty ranging from zero per cent for raw materials to 10 per cent for intermediate goods and 25 per cent for finished products.
The bulk of small traders import finished products from China and Dubai, which means they now pay a higher tariff of 25 per cent.