Kenya backs down on import tax
An overview of the container terminal at the Kenyan seaport of Mombasa. PHOTO BY MONITOR CORRESPONDENT
What you need to know:
Regional ties. URA officials say its Kenyan counterpart agreed to reinstate the status quo on sugar in transit and vehicles, including refraining from taking ad hoc decisions before further consultations.
Kenya’s tax body has finally bowed to pressure and lifted its controversial tax policy which threatened the economies of countries and political harmony in the Great Lakes region.
After holding cargo bound for Uganda for more than a fortnight, the Kenya Revenue Authority (KRA) on Monday evening yielded to pressure and suspended the measure compelling Ugandan traders and manufacturers to pay a crippling cash bond equivalent to the total value of the tax that would be charged were the Ugandan-bound cargo is to be sold in Kenya.
Before this, importers of goods through the Kenyan seaport of Mombasa had only been required to execute a non-cash insurance bond. By last weekend, more than 600 containers with several of them containing important raw materials, and about 2,000 vehicles had piled up at Mombasa following the KRA’s decision.
An emergency meeting was called between the tax bodies of Uganda and Kenya with East African Community authorities also taking an active interest in the dispute.
Uganda Revenue Authority Commissioner for International trade Richard Kamajugo told Daily Monitor yesterday that its Kenyan counterpart agreed to reinstate the status quo on sugar in transit and vehicles, including refraining from taking ad hoc decisions before further consultations.
“I think this is fair enough because this is more or less what has been happening before this decision was enforced. I think we have got what we had wanted,” he said.
When tasked to explain what informed their decision, the KRA officials are reported to have said they suddenly discovered excess sugar that should have been re-exported and that URA did not give them enough co-operation.
According to Mr Kamajugo, KRA did not share this information with them, implying that whether it is true or not, as an institution it couldn’t do much.
On the allegation of lack of cooperation, Mr Kamajugo said KRA failed to cite particular situations where they were approached for assistance but didn’t get full cooperation.
In an interview, Mr Kenneth Bagamuhunda, the director of Customs at the EAC secretariat, on Monday said: “This is not the best way to [promote regional trade] but I have assurance from Kenya that it will review this decision soon.”
