KAM CEOs Brief | 9 September 2016

KAM engages Public Institutions Dealing with Revenue Generation

Kenya Association of Manufacturers (KAM) engaged Council of Governors, Commissioner of Revenue Authority and County Assemblies Forum on September 7 2016 in view of addressing Inter-County trade challenges in the country.

Manufacturers cited issues such as company drivers being arrested and harassed by county officers, Losses in terms of damaged goods and spoilt fresh produce when it is impounded as county officers make demands for branding fees and other charges, lack of legislation to guide revenue management and the lack of utilisation of ICT in revenue collection among others.

Speaking at the forum, KAM CEO, Phyllis Wakiaga stated that manufacturers are still facing challenges in inter-county trade despite intervention through policy formulation and legal frameworks in place.

KPA Stakeholders Meeting Held

KAM participated in the KPA stakeholders meeting on 6th September, 2016 at KPA ICD in Embakasi.

Key issues noted included:

• The Standard Gauge Railway (SGR) construction to Nairobi is at its final stages.
• The operations of the ICD in Nairobi and container terminal at the port of Mombasa had been affected since part of the yard had been taken up by the SGR project.
• The number of shutouts at the Port in Mombasa had increased to 31 shutouts in August compared to 15 in July due to: erroneous VGM certificates from shipper, KRA delays in container release and the lengthy transit period of wagons from Nairobi to Mombasa.
• The KRA station manager at the ICD stressed the fact that containers should only be brought into the ICD after the relevant entries have been passed. KRA also reported that they are working out on a way to ensure that the auctioning exercise at the customs warehouse is done on a monthly basis.
• Kenya Maritime Authority had begun an audit of the operations of all the organizations that were approved to carry out weight measuring under the SOLAS Convention amendment, this was due to the massive discrepancies that had recently been noted on the VGM certificates when random weight measuring was done at the Port in Mombasa.
• KENTRADE reported that the single window system was at its final stage of implementation and they are also rolling out an e-trade portal and a module on duty remission.

Engagements with Embu, Nyeri and Murang’a Counties on Inter-County Trade

For the last two months, there has been an increase in the trade license issues received from members while distributing goods in Embu, Murang’a and Nyeri Counties.

KAM has since engaged officials from Embu, Nyeri and Murang’a Counties to begin the conversation on how KAM will partner with them to lay down structures for trade (distribution) licenses. Structures that will facilitate smooth transfer of goods and services for our members.

Since 2013, internal barriers to trade and free movement of goods in form of negative revenue raising measures by the 47 counties have increased; through introduction of multiplicity of business regulations, licenses, fees and charges without due regard to the principal legislations such as the Statutory Instruments Act, which provides for impact assessment on the economy.

Whereas KAM recognises the need for Counties to raise revenue, county governments should strive to strike balance between promotion of business growth and raising the revenue.

The haphazard manner in which these permits are being charged is alarming. The charges vary per instance, raising a lot of questions on their validity. Harassment by the county revenue/enforcement officials has also been reported on several occasions. Also due to the perishable nature of some of the products being distributed, some of these cases require be resolved with urgency. However, sometimes urgent and satisfactory solution is hard to achieve due to lack of proper relationship channels with the county governments in question.

Cases Reported within the last 3 months included:

• Capwell Industries truck impounded at Murang’a county for Ksh. 36,000 trade license fees (distribution)
• Mzuri Sweets Ltd truck impounded in Embu carrying perishable baked products for Kshs. 80,000 trade license fees, backdated to 2013 plus penalties.
• Another Capwell Industries truck impounded in Murang’a for Ksh. 12,000 distribution fees
• Africa Cotton Ltd truck charged Ksh. 30,000 in Embu for single business permit.
• Kenafric Industries truck charged Ksh. 36,000 in Embu for single business permit.
• Farmers choice truck carrying perishable goods impounded for two days and charged Ksh. 132,400 for SBP, branding and penalties for non payment for the year 2015 permit.