KRA Reforms Aimed at Enhanced Trade Facilitation

BLOG 13/06/2018

KRA Reforms Aimed at Enhanced Trade Facilitation

Whenever one hears or comes across the name Kenya Revenue Authority (KRA), what comes to mind immediately is tax. This is further advanced by the media, which invariably refers to KRA as the ?taxman?. However, KRA is not only a tax collection agency, but also a facilitator of global trade. Trade plays an important role in accelerating economic growth and poverty eradication.

Recently, the public had an opportunity to interact with KRA at its booth set up at KICC, Nairobi, during the Kenya Trade Week. Cabinet Secretaries Henry Rotich (National Treasury) and Adan Mohamed (Industry, Trade and Cooperatives) accompanied by Trade Principal Secretary Dr Chris Kiptoo were among the dignitaries who visited the KRA booth. The government officials commended KRA for a job well done in facilitating trade through the various mechanisms put in place such as automation of processes to enhance efficiency.

KRA has taken an integrated and comprehensive approach aimed at improving its systems, especially in customs operations. Transformation began by ensuring that challenges relating to processing of import and export cargo are reduced to make local and international business efficient.

The integrated and comprehensive approach is likely to benefit the government, manufacturers, traders and consumers. The approach focuses on infrastructure, such as One-Stop Border Posts and information technology.

KRA is focussed on ensuring compliance with standards, adoption of best practices and procedures to improve competitiveness of Kenyan products both locally and across the borders.

In the past, Kenyan businesses have been challenged by many trade restrictions both locally and internationally. Transactions previously took longer to conclude because of lengthy procedures. KRA has put in place mechanisms to ensure local businesses and cross-border trade thrive. In addition, KRA has automated its systems to eliminate Customs challenges that hampered cross-border trade.

Various programmes aimed at reforming Customs operations have been implemented to improve trade. They include implementation of the Single Window Concept, through a project known as the Community Based System (CBS).This is an ICT system which integrates all trade facilitating agencies and business communities with KRA.

Further, KRA has introduced the Integrated Customs Management System (iCMS), which significantly reduces the time taken to clear goods at ports of entry. Unlike the previous Simba System, iCMS enables KRA to receive declarations of goods way before the ships dock at the port. This will essentially reduce the time taken to clear goods as they would have already been verified by the time they arrive. iCMS is indeed a game changer in trade facilitation.

KRA is enhancing the pre-arrival programme at the port to ensure compliant clearing agents, transporters and importers are issued with Authorised Economic Operators (AEOs) certificates. This is part of risk profiling supported in iCMS and aimed at ensuring 70 per cent clearance of cargo at the port as stipulated in the Port Charter. This will not only be of great benefit to the importers, but also the consumers as they will receive their goods much faster.

As the goods leave the port, another automated system which provides real-time monitoring (tracking) of cargo from the port (or manufacturer in case of local goods meant for export) to its final destination picks up the operation. The system, Regional Electronic Cargo Tracking System (RECTS), has reduced the number of days taken to deliver goods to their destination along the Northern Corridor.

RECTS has also helped curb tax evasion and improved efficient management of transit goods in the region. The system has enhanced the safety of transit cargo as it allows seamless tracking to the destination.

KRA is among government organizations which enforce international laws. In this regard, most of the cargo destined for export through all the ports is subjected to scanning. This builds trust as it facilitates taxpayers to foster compliance with tax and Customs legislation.

Furthermore, KRA has implemented a framework for joint inter-agency coordination in investigation of serious security and Customs-related crimes. KRA views inter-agency coordination as crucial while dealing with serious Customs tax evasion, including those involving concealment, mis-declaration and trafficking of prohibited goods.

These inventions are effective deterrence tools that comply with World Customs Organisation (WCO) standards to secure and facilitate global trade, Container Security Initiatives (CSI), International Ship and Port Facility Security (ISPS) code and recommendation of WCO Kyoto Convention.

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