Tanzania will this week join Kenya, Uganda and Rwanda in rolling out the clearance of goods under the East Africa Community Single Customs Territory (SCT).
The system seeks to eliminate dumping of goods in countries of transit, thus protecting industries and jobs.
The Kenya Revenue Authority (KRA) said in a notice that from September 15, Kenya and Tanzania will start trial clearance of goods under the SCT.
The goods include rice, maize, sugar, cigarettes and edible oil. Under the system, importers will pay duty on goods to the country of destination before the consignments are cleared by the port of entry.
Maritime goods are motor vehicles, textile, fabrics and electronics. Broadening of the single territory reach will also see duty for more goods destined for Uganda such as sugar, rice, used clothes and shoes and cigarettes paid for before they leave the gateway port.
Tanzania Deputy East African Co-operation Minister Abdallah Saadalah said the Mombasa and Dar es Salaam ports would assess the goods on behalf of the countries where the goods were destined.
“Cargo being transported from either ports is monitored through the electronic cargo tracking system,” he said, adding that customs and revenue officials from Rwanda, Burundi and Democratic Republic of Congo had established offices at the port to collect duty.
According to Richard Kayombo, the Tanzania Revenue Authority’s director for tax payers services and education, a decision had been reached to have duties paid directly to the revenue collection agencies of the respective countries because it simplified accounting.
“This is a milestone for the Customs Union because it will help avoid domestic hurdles and speed up movement of goods from entry point to destination,” he said.
The new development has been praised by East African Business Council chairman Felix Mosha, who said that Single Customs Union duties had to be paid in cases where goods imported into a member state were re-exported to another country.
“In the long run this will increase efficiency and reduce corruption,” said Bakheresa Group general manager Ashraf Khan.
The move to clear more goods under the SCT follows a successful pilot in January on consignments to Rwanda and Uganda that included fuel, edible oil, steel products, milk and milk products, neutral spirit, confectionary and cement from the port of Mombasa.
With the entry of Tanzania, Burundi is the only EAC member that is yet to join SCT. Rwanda has already implemented the system for all imports while Uganda has all intra-regional and petroleum products on transit under the advance duty payment system.
“Burundi was not ready and we decided to start with Tanzania,” said a KRA official.
Leonce Niyonzima, Burundi’s Revenue Authority director in charge of Customs, Border and Ports, said his country will join the customs territory next month once a reliable link between the Burundi Revenue Authority and KRA is in place.
“We are still registering companies that will join the system but some like Burundi Brewery Company and Bahkresa Grain Milling are already clearing their goods using the SCT system for goods passing through Dar es Salaam port,” said Mr Niyonzima.
Burundi, last week, started trials for electronic tracking of cargo in transit in a bid to prevent dumping of goods in the local market for which no taxes have been paid.
Mr Niyonzima said the Electronic Cargo Tracking System would protect local industries and jobs by reducing transit time and checking diversion of goods.
In Uganda, payment of duty on sugar, rice, used clothes and shoes, cigarettes, neutral spirits, alcoholic drinks, all beverages and dry cell batteries started in July when the SCT was fully rolled out.
“Importers, however, have the choice of paying immediately so that goods are cleared, or they can use the old system where the goods are warehoused,” said the revenue authority’s spokesperson Sarah Banage.
The new system has reduced the time taken on documentation and multiple customs declarations by 90 per cent.
“It now takes less time to clear and move goods to Malaba. For example, moving petroleum products between Kisumu and Malaba now takes eight hours instead of the previous three days,” said Christopher Turyasiima, a customs officer at SPEDAG Interfreight Logistics.
Kenya, Uganda and Rwanda had earlier agreed on July 1 as the deadline to fully roll out the SCT before Tanzania and Burundi came on board later.
Adopted model
The EAC partner states have adopted the SCT destination model where duties are assessed and paid for on arrival at the first point of entry.
“This means the partner state to which goods are destined will collect the taxes and notify the first point of entry to release the goods,” said Ezekiel Maru KRA’s deputy commissioner marketing and communication.
At the first point of entry, depending on the level of risk, customs officers from the destination country, who are posted at the first point of entry (Mombasa or Dar es Salaam), can subject the goods to physical examination before release.
Mr Maru said customs declarations are made electronically and processed and released by the authorities from the country of destination prior to loading of goods and release from the port. Cargo is then weighed only once upon entry into a partner state unlike before when multiple checks were obtained.
“The advantage here is that it will ease the movement of the consignment through Kenya to Uganda, given that import levies have been removed and an importer is only required to pay domestic taxes that apply in the destination country such as value added tax,” said Mr Maru.
The East African
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