Partner States of the East African Community will jointly collect customs taxes starting July following a successful test-run on a selected range of commodities.

Kenya, Uganda and Rwanda have been experimenting on the system, known as the Single Customs Territory (SCT), since April 1.

Under the system, importers in the countries are required to lodge import declaration forms in their respective home countries and pay relevant taxes to facilitate the export process.

Respective revenue agencies will then issue a road manifest against the import documents submitted electronically by tax officials of the importing country, reducing bureaucracy and the high costs associated with lengthy cross-border documentation.

Cement, cigarettes and neutral spirits were the first products to be handled under the SCT scheme. The list of products has since grown to include Steel, edible oils, confectionery and milk.

Clearance and shipment

Kenya Revenue Authority (KRA) senior assistant commissioner Rosemary Murithi said the system had helped Uganda and Rwanda shave off Sh40 billion in clearance and shipment costs from the port of Mombasa.

The savings arose from a reduction in the number of days taken to clear goods from Mombasa port by more than three-quarters as well as removal of customs stations and road blocks along the Northern Corridor.

READ: EAC market takes leap forward with single customs deal

Ms Mureithi said the benefits achieved so far were expected to continue with the full implementation of the system from July, in which case Kenya will also benefit as an importer of goods from Uganda and Tanzania.

Kenya occasionally imports food items such as maize from the neighbouring countries, especially in times of drought and famine.

However, its exports to Uganda, Tanzania and Rwanda far exceed its exports. Kenya exported goods worth Sh65 billion to Uganda in 2013, but imported products worth only Sh16 billion. It exported goods worth Sh40 billion to Tanzania but imported products worth Sh12 billion.

Kenya exported goods valued at Sh13 billion to Rwanda and imported Sh1 billion worth of products.

“We are looking forward to rolling out the SCT in the whole region,” said Ms Muriithi during a workshop in Nairobi.

Source: Business Daily

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.