What happened

Kenya Revenue Authority (KRA) chair Ndiritu Muriithi has called for the implementation of a new system to reduce the costs associated with consolidated cargo. This move is expected to improve efficiency and reduce expenses for importers and exporters in the country. According to reports from People Daily, Muriithi's proposal aims to streamline the cargo clearance process, making it more cost-effective for businesses involved in international trade.

Context and background

The Kenya Revenue Authority is responsible for collecting revenue on behalf of the government and has been working to improve its systems and processes to facilitate trade and reduce costs for businesses. The current system for consolidated cargo has been criticized for being cumbersome and expensive, leading to increased costs for importers and exporters. Muriithi's call for a new system is part of the authority's efforts to address these concerns and improve the overall efficiency of the cargo clearance process.

The proposal for a new system is also in line with the government's efforts to improve the business environment and increase trade in the country. The government has been working to reduce the costs and bureaucratic hurdles associated with doing business in Kenya, and the implementation of a new system for consolidated cargo is expected to contribute to these efforts. The KRA chair's call for a new system has been welcomed by businesses and trade organizations, who have been advocating for reforms to the cargo clearance process for some time.

The current system for consolidated cargo involves the use of a single bill of lading to clear multiple shipments, which can be time-consuming and expensive. The proposed new system is expected to simplify this process, reducing the time and cost associated with clearing consolidated cargo. This, in turn, is expected to increase trade and improve the competitiveness of Kenyan businesses in the regional and global markets.

Compared with what is normal

The costs associated with consolidated cargo in Kenya are relatively high compared to other countries in the region. The implementation of a new system is expected to reduce these costs, making Kenya more competitive in terms of trade and investment. According to industry experts, the average cost of clearing consolidated cargo in Kenya is around 15% to 20% of the total value of the shipment, which is higher than the regional average.

  • The average time for clearing consolidated cargo in Kenya is around 5 to 7 days, which is longer than the regional average.
  • The complexity of the current system for consolidated cargo has led to increased costs and bureaucratic hurdles for businesses.
Why it matters

The implementation of a new system for consolidated cargo is expected to have a significant impact on businesses involved in international trade in Kenya. The reduced costs and increased efficiency associated with the new system are expected to increase trade and improve the competitiveness of Kenyan businesses. This, in turn, is expected to lead to increased economic growth and job creation in the country.

The new system is also expected to improve the business environment in Kenya, making it more attractive to investors and traders. The reduced costs and bureaucratic hurdles associated with the new system are expected to increase investor confidence and encourage more businesses to invest in the country.

Practical steps
  • Businesses involved in international trade should monitor the progress of the new system and be prepared to take advantage of the reduced costs and increased efficiency it offers.
  • Importers and exporters should review their current cargo clearance processes and identify areas where they can improve efficiency and reduce costs.
  • Trade organizations and businesses should continue to advocate for reforms to the cargo clearance process to ensure that the new system is implemented effectively.

The Tax Planning & Compliance service can help businesses navigate the new system and ensure they are taking advantage of the reduced costs and increased efficiency it offers. By working with a reputable and experienced tax advisory firm, businesses can ensure they are in compliance with all relevant regulations and are maximizing their savings.

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Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.