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Uganda tea exporters reject KRA proposal

By | July 25th 2011 at 00:00:00 GMT +0300

By Sandra Chao

The Ugandan tea exporters have opposed the proposal by the Kenya Revenue Authority to reintroduce bonded warehouses to replace the existing transit warehouse systems.

Vinod Vadera of the Kakonde tea estate in Uganda said the move was retrogressive and would not be beneficial to tea exporters.

"We had struggled through the East African tea traders association to remove the bonded warehouse system to what is currently present and we oppose the move to go back," he said

Vadera was speaking at the closure of the First African tea conference at the Whitesands hotel in Mombasa.

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The exporters said the failure in the system was brought about by inefficiency at the customs office, and removing the system would be punishing them unfairly.

"Customs officials are the ones at fault here. They take up to two years to inspect the warehouses and find the systems being misused when they have the capacity to inspect the system every month," he said.

Vadera said the move would increase costs unlike the current system transit warehouse systems.

Less competitive

"Bonded warehousing is likely to increase the cost for Ugandan exporters, which will make the tea less competitive," he said.

Valdera also pointed out that bonded warehouses would create procedural delay in the release of tea that would further increase the cost for tea exporters.

"With bonded warehouses you need customs officers to physically release them and some even delay for two or three days," he said.

The exporters also raised alarm on the considerable delay at the Kenya-Uganda border that makes them waste time they would have spent participating in the Mombasa auctions

"A lot of time is wasted in issuing of receipts, verification and clearing at the Malaba post, and this makes Ugandan exporters arrive late for auctions, becoming less competitive," he said.

Vadera also called for the removal of re-export charges, saying they were paying for products that have already been sold off to third parties. Re-export charges should be directly put to the person who has won at the auction from Kenya because at that time Ugandans have sold of the tea and it is no longer in their hands," Vadera said.


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