Adoption of the Authorised Economic Operators (AEO) customs clearing programme in the country has been slow over the past years despite the government backing it to boost import and export trade.
Since its launch in 2007 with only 11 companies, it currently has 325 accredited companies in the country and 202 within the East African region.
Even so, the taxman sees a potential in growing the numbers further as it plans to launch the national AEO framework later this year.
The government has thus decided to come up with a partnership engagement that seeks to woo more customs to onboard the programme to boost trade.
Through the engagements, the taxman also seeks to foster synergy between various government agencies and its leadership to expedite cargo clearance processes and increase revenues.
It will also point towards improving the country's investment attractiveness index, prompting more Foreign Direct Investments.
The taxman is further advocating for more partnerships between customs and businesses.
According to KRA's Trade Facilitation deputy commissioner Susan Wanjohi, the taxman needs to foster more collaborative partnerships between CEOs, government officials to fast-track the onboarding of more customs towards realisation of the programme’s benefits.
“The initiative ensures facilitation of legitimate trade, curbing fraud, enhances efficient tax collection and embraces modern based practices key in fostering international standards for competition, making the country more investor-attractive,” Wanjohi said.
She added that the programme is essential in enhancing better turnaround time at ports, improving port efficiency which points towards ease of doing business in the country and the East African region.
Benard Ndungu, the director of the general of accounting services and quality assurance at the National Treasury, reiterated the benefits of the programme noting its capability to reduce the time of customs clearance by more than 25 per cent.
“For instance, the programme has necessitated the faster clearance of air cargo from six days to two days, also reducing the duration of transactions,” Ndungu said.
Importers and exporters under the AEO initiative account for about 30 per cent of the customs revenues collected in the country, according to the taxman.
With the reiterated slow uptake of the initiative, the taxman thus decided to accelerate the adoption as the framework is expected to have a positive impact on businesses in the country.
“We hereby urge, most especially the Micro Small and Medium-sized Enterprises (MSMEs) to join the programme, on account of their notable contribution to the country’s GDP,” said Pamela Ahago, the acting commissioner for customs and border control.
SMEs are projected to contribute up to over 40 per cent of the country’s GDP in the coming year despite facing challenges such as lack of access to affordable financing, a concern that the programme also seeks to address.
Commending the initiative also, was Kenya Pipeline Authority managing director William Ruto, who says the programme has had a remarkable impact on port operations, for instance reducing cargo clearance time from a span of eight to 12 days to three to four days.
He notes that the initiative is crucial in facilitating pre-arrival clearance processes that have improved the efficiency and timeline of clearing goods once they dock at the port.
The German Development Cooperation committed to supporting the taxman in its ambitions to boost the country's trade and attractiveness to investment, through the International Trade Area.
The cooperation head, Counselor Embassy of the Federal Republic of Germany in Nairobi, Daniel Guenther, said they are keen on helping Kenya address its challenges on poverty reduction and creation of job opportunities through trade facilitation.