By Glenna Nyamwaya
Fresh data obtained from the Kenya Revenue Authority (KRA) has revealed that the taxman has grown daily non-oil revenue by Sh131 million in six months ended December 2017 compared to the similar period in 2016.
The growth is attributed to the increased use of cargo scanners introduced in August last year at the port of Mombasa and the Jomo Kenyatta International Airport (JKIA).
KRA introduced the cargo readers as part of a major strategy to tame tax cheats who habitually made false declaration of goods handed for processing. The scanners are located at key ports of entry including Kilindini port, JKIA, Moi International Airport, Mombasa, Eldoret International Airport, the Inland Container Depot in Embakasi and a few Container Freight Stations (CFSs).
KRA said collections from non- oil imports averaged Ksh1.257 billion daily in the July-December 2017 period compared with Ksh1.126 billion in 2016. Outgoing KRA Commissioner- General John Njiraini also attributed the growth in daily revenue flows at the Customs to benchmarking of cargo values to address undervaluation and stricter application of cargo auction processes.
“Customs recorded overall growth of 7.7 per cent, with non-oil collections, which account for about 70 per cent of revenue growing at 8.1 per cent,” Njiraini said in a statement. “ C u s to m s per for m an ce, however, continued to be adversely impacted by sluggish import growth with container volumes in H (first half) recording marginal growth of 2.8 per cent compared to growth of 4.9 per cent in H1 of FY (financial year) 2016-17 (which ended last June),” the statement further read.
The KSh900 million Scanner Integration Project donated by the Chinese government connects all readers at border entry points to a command centre at Times Towers. The government further spent KSh100 million for installation of the scanners, bringing the total cost to Sh1 billion.
“We are creating software that will integrate the scanners so that all images are sent to a command point in Nairobi for analysis and decision making.This will also eliminate possible collusion by interested parties,” Njiraini said.
The replacement of the Simba cargo clearance system is on course and the Integrated Customs Management System (ICMS) that was piloted in October 2017 is set to be complete by March 2018. The system incorporates special features such as valuation of goods, a manual time-consuming activity done before releasing cargo which will effectively be phased out, enhancing the integrity of cargo release records.
The cargo scanners are fashioned to non-intrusively facilitate the clamp down on smuggling of goods into the country by rogue traders and reduce collusion by various actors at border points to defraud the taxman revenue through corrupt deals. Initially, KRA had the capacity to scan 500 containers per day but since the cargo scanners were introduced, their capacity has been improved to 1000 containers daily or 40 per cent of all the containers received and processed each day.
The integration has so far helped customs officials monitor and analyses contents of cargo entering and leaving the country from the command centre unlike previously where experts were only able to physically perform the necessary image analysis in Mombasa.
Cargo inspection is a critical aspect in safeguarding the supply chain security and protection of society against organised transnational crimes of terrorism, hazardous substances and environmental crimes and facilitation of legitimate trade. Since 2003, KRA has been employing use of modern cargo inspection tools through operationalization of X-ray cargo scanning solutions at the Mombasa seaport and airports.
In the year 2016, the X-ray cargo scanning unit at the Port of Mombasa made high profile interceptions including the discovery of nine top of the range vehicles, with a duty value of Sh16 million, concealed as bicycles and toy donations from the United Kingdom on transit to Uganda.
Apart from the interception of contraband goods, the scanners h ave also helped prevent perpetrators of the criminal activities from dumping cheap, substandard and harmful products in the local market to the detriment of Kenyans. To complement the capacity of the cargo scanners, KRA also received a donation of 10 baggage scanners from China for baggage screening at the 3 major airport terminals to boost customer facilitation in airports.
Other initiatives such as the implementation of the single customs territory, the regional electronic cargo tracking system and the integrated customs m an a g e m e n t s ys te m , wil l collectively reduce the cargo dwell- time at the Port of Mombasa.
The enhanced systems will also significantly reduce the time taken to transport cargo to inland container depots and neighbouring destinations. It will also transform the Port of Mombasa to be more competitive and promote economic growth in the region and internationally.