Importers of various consumer goods including used cars, clothing, food, alcohol, and office supplies will be required to pay taxes immediately their cargo enters the country from October 12.
The Kenya Revenue Authority gave a notice eliminating the use of bonded warehouses for such goods. This means that the benefits of delayed payments of taxes and stock management will soon not be there.
KRA pushed the deadline of the notice which was to kick in August after intensive lobbying a review on the list of goods locked out of the bonded warehouses.
“The coming to effective date was pushed forward by 60 days after industry has sought dialogue with various government entities, including the Ministry of Industrialisation, Trade, and Cooperatives, The National Treasury. The stakeholders through their umbrella bodies (AKS, KIFWA, WASIA, SCEA) held a consultative meeting with KRA to discuss the concerns about the implementation of the gazette notice,” KRA said.
Shippers Council of Eastern Africa CEO Gilbert Langat pointed out that the moratorium was pushed after a protest that the cost of business will rise and the port of Mombasa would lose a competitive edge over the blanket directive.
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“Bonded warehouse is an international concept and people do not just do it for convenience but rather for logistic and cash flow. We are currently having discussions on what items will be on the list,” Langat said as reported by Business Daily.
Analysts have warned that the measures, aimed at sealing revenue loopholes and fast-tracking revenue collection, will have the unintended effects of disrupting supply chains consequently affecting Kenya’s position as a regional investment hub.
Related: KRA Tightens Tax Collection Moving Services To Mpesa
