Posted on August, 3, 2018 at 09:15 am
By PATRICK ALUSHULA
The Kenya Revenue Authority (KRA) has dropped its earlier decision to confiscate and destroy entire consignments of imported goods found packed in containers alongside counterfeits, offering a much-needed lifeline to small businesses.
The taxman, in a Tuesday memo, opened a limited window to clear all genuine imports that arrived in Kenya by June 30 but were held together with consignments that contained counterfeits and undisclosed imports.
KRA Commissioner for Customs and Border Control Julius Musyoki said in the memo to chief managers and deputy commissioners that the decision was made to save small importers from the agony that strict clearance guidelines had caused.
“Following extensive consultations between the government and representatives of the Small Business Traders Association, an understanding was reached on the need to alleviate the burden incurred by the traders on containers whose clearance has been delayed for various reasons,” Mr Musyoki said.
The KRA said it was allowing the clearance of imported goods listed in the containers under the old benchmark framework, which punishes importers of fakes and contraband goods but leaves out the rest even if they are found in one container.
“It should be noted that this is a one-off amnesty applicable to goods that arrived in the country by 30th June 2018,” the KRA said.
Mr Musyoki further directed all the five general managers at the Mombasa Port to ensure that the process begins immediately. The directive means some 217 containers with processed and legal imports will be released to their respective owners, easing the pain of importers.
The KRA in May issued a notice warning importers, exporters and clearing and forwarding agents that any counterfeit or concealed goods found in a container would lead to forfeiture and destruction of the entire consignment.
The directive has since caused a lot of pain to many small importers, whose goods share containers. A single container could carry goods belonging to up to 10 different traders, lowering the ability of each individual to ensure the legality of what is packed alongside their ware.
Anne Nyokabi, the chairlady of the Nairobi Importers and Traders Association, an industry lobby that last month held street protest over withheld imports, has put the value of affected goods at more than Sh10 billion.
Reprieve
On Wednesday Ms Nyokabi told the Business Daily that the KRA’s decision has offered reprieve to the many traders, who have suffered loan defaults and revenue losses in the ensuing stock-outs.
“It is a reprieve because the moment those containers are cleared, it is money coming back to the economy. KRA has given us 14 days to complete the entire process so we have started to submit documentation for clearance,” Ms Nyokabi, an importer of electrical goods, said.
Mr Musyoki said the taxman's decision to temporarily revert to the old benchmarks to clear the consignments will address the plight of small traders and help them recover from the adverse effects of last year’s unfavourable business conditions.
Managers in charge of Valuation and Document Processing Centre, an online document processing and validation centre, have been asked to ensure only specified containers are processed when the yield is met.
Mr Musyoki has directed that the containers be scanned and gross concealment cases be referred to Deputy Commissioner-General, Revenue and Regional Operations.
“Reconciliation will be undertaken at the end of the clearance process to ascertain that only the specified containers have been granted clearance under the amnesty window,” he said.
Ms Nyokabi, however, insisted that it may take up to four months to get the supply chain back to normalcy, arguing that the standoff had seen many traders stop new orders.
KRA, Kenya Bureau of Standards and Anti-Counterfeit Agency officials are this morning expected to meet the traders to discuss the way forward once the amnesty expires.
Among the issues to be discussed are taxation requirements and the approved standards of goods required to be met when importing.
In his State of the Nation address in May, President Uhuru Kenyatta told Parliament that tax evasion, counterfeiting and unlicensed products like alcoholic and illicit brews were denying the economy more than Sh30 billion annually.
Source: Business Daily