AHAGO: How KRA's new programme facilitates cross-border trade

The government is committed to promote investment and trade aimed at stimulating economic growth. This is because trade is a vital engine for economic development, and countries must therefore ensure that trade policies and regulations are conducive for establishment and growth of investments.

Through its linkages to all the sectors of the economy, trade supports various industries by creating markets through which goods and services get to the consumer and therefore provide the channel through which effects of economic growth are transmitted to various players in the economy.

The government has therefore established a number of initiatives aimed at improving the ease of doing business and boosting the country’s competitiveness to engage in international trade.

Beside its role of revenue collection, the Kenya Revenue Authority is one of the government agencies mandated to facilitate trade in the country. The agency has implemented various reforms to enhance trade facilitation and ease the cost of doing business while improving compliance with relevant laws and regulations.

The implementation of Authorised Economic Operators programme for example has greatly improved cross border trade within the East Africa Community region and the rest of the world.

AEO expedites the movement, release and clearance of goods at ports and border stations by creating a partnership between customs and businesses where mutual trust is established. The consignments of businesses under this programme undergo less scrutiny at the border and ports compared to other regular cross border traders.

In addition to faster clearance times, the AEO programme has boosted trade activity thereby creating increased opportunities for young job seekers in the labour market. This is besides recognition of Kenya as a preferred trade destination and increased foreign direct investment to the economy.

The programme has also enabled KRA to enhance revenue collection. It is significant to note that approximately 30 per cent of customs revenue is paid by AEO importers. The authority intends to grow this figure by enhancing trade facilitation for the current AEOs and expanding the programme to include other compliant taxpayers in other categories, especially those in warehousing and MSMEs.

The benefits of the AEO programme are not limited to businesses alone. The programme is also critical in ensuring the security of our supply chain, which is essential for national security and economic growth. A secure supply chain helps to prevent illegal trade activities, such as smuggling and counterfeiting, which can have a detrimental impact on our economy.

In addition to enhancing security, the AEO programme also helps to reduce the cost of doing business for many companies. By reducing the time and resources that businesses need to spend on customs clearance procedures, the AEO programme has helped to make Kenya a more attractive destination for foreign investment. This, in turn, has helped to create more jobs and boost our economy. To date, 338 companies have received AEO accreditation and KRA is calling for more businesses to join the program.

KRA has also implemented other strategic initiatives to facilitate trade.

Other initiatives KRA has implemented include the establishment of the One-Stop Border Posts. The OSBPs have facilitated the clearance of goods and reduced the time required for customs and immigration procedures. The OSBP concept has enabled KRA to enhance its efficiency and improved revenue collection by improving border crossing speed and business competitiveness with other countries. Since the establishment of the OSBPs, KRA has witnessed a tremendous growth on customs revenue.

KRA in partnership with the Revenue Administrations of the EAC Partner States (Uganda and Rwanda) have also implemented the Regional Electronic Cargo Tracking System. The system enables real time tracking of transit cargo from the Port of Mombasa to its final destination through an online digital platform.

The Authority has also invested in cargo scanning equipment to aid in non-intrusive inspection of goods. KRA has installed 33 cargo and baggage scanners and deployed them in various ports of entry in the country.

Further, KRA has automated all its core customs business processes through the Integrated Customs Management Systems platform. The iCMS system is a one stop system for all the Customs Processes, including processing of customs declarations, revenue assessment and payment, intelligence based risk management as well as post clearance audit. All the functions supporting cargo clearance are domiciled within iCMS.

KRA will continue implementing programmes aimed at facilitating fair and secure trade environment in line with universal customs best practice, while enhancing KRA's capacity to assure revenue collection.

 

The writer is acting commissioner for Customs and Border Control, Kenya Revenue Authority