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Agents differ with KRA over order that importers pay duty directly

MY RIDE
By | February 26th 2009

By Patrick Beja

Clearing and forwarding agents have opposed a directive by Kenya Revenue Authority (KRA) that importers pay duty directly to the taxman.

The order by KRA’s Commissioner for Customs Services Wambui Namu, last week, has cut off clearing and forwarding from the process of paying duty on behalf of consignees.

Sources within KRA said apart from problems related to false declarations, some agents inflated bills for importers to settle as import duty after they remit taxes on their behalf.

However, agents under the Kenya International Freight and Warehousing Association (Kifwa) umbrella have opposed the move arguing it was contrary to business ethics and practice.

Collection of revenue

Kifwa National Vice-chairman Peter Mambembe said the move would negate the current system where agents pay taxes on behalf of importers and seek refunds within 30 days.

"It is therefore wrong for the Customs department to issue such a notice," said Mambembe.

He warned that the move would adversely affect the collection of revenue and smooth running of Mombasa port since it could lead to congestion.

In a paid advertisement last week, KRA said the new directive would address the problem of false declarations.

Namu wants the consignee of imported cargo to pay duty only in a bankers cheque.

"The payments should be by banker’s cheque only. The cheque should be paid directly by the importer (not their appointed clearing agent) to our designated banks," the Customs commissioner said.

The importer should be the one whose name appears in the Customs declaration (entry) documents.

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