New online cargo clearance fees ‘hurting Kenyan goods’

What you need to know:

Importers are now required to pay Sh5,000 annual fee besides value added tax (VAT).
The user must also pay Sh750 for a unique consignment reference number plus VAT and an arrival notification fee per vessel of Sh7,500, plus VAT.
In an earlier interview, Kentrade CEO Amos Wangora was full of praise for the system, which has eliminated need to seek clearance from State agencies.

Local industrialists have flagged the new Kenya TradeNet System fees among top hurdles that stand in the way of the government’s effort to boost employment and exports via the manufacturing sector.

The system, which serves as a national electronic single window for lodging international trade documents, has been free from 2012 when it was launched up to last week when the Kenya Trade Agency (Kentrade) introduced user charges.

Importers are now required to pay Sh5,000 annual fee besides value added tax (VAT). The user must also pay Sh750 for a unique consignment reference number plus VAT and an arrival notification fee per vessel of Sh7,500, plus VAT.

“Introducing charges on importers using the platform only serves to increase input costs that will be passed on to consumers via price increments,” said Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga.

“These charges only serve to make goods uncompetitive in a regional market shared with competitors in Uganda and Tanzania whose governments do not charge for use of single window systems.”

In an earlier interview, Kentrade CEO Amos Wangora was full of praise for the system, which has eliminated need to seek clearance from State agencies.

According to Mr Wangora, the economy was able to save Sh2.5 billion in its first five years of roll-out alone. “The system has simplified trade procedures and processes, resulting in substantial cost savings,” he said.

In a memorandum to the Trade ministry, however, KAM has termed as “unnecessary” the user fees.

“Most manufacturers importing raw materials absorb numerous charges that make them start production with an unnecessary 13 percent cost disadvantage compared to our neighbouring countries within the EAC,” said Ms Wakiaga.

Meanwhile, KAM wants agencies that have ignored the presidential Buy-Kenya-Build- Kenya’ decree “severely punished”, adding that regulations should be created to force public servants to rely on locally made goods and services.