Clearing agents threaten to sue Michuki

November 4, 2008

, NAIROBI, November 4- Several clearing and forwarding agents are now threatening to sue Acting Finance Minister John Michuki over a directive that prohibits them from transacting business within the precincts of the Port of Mombasa.

The Kenya International Freight and Warehousing Association (KIFWA) vice chairman Peter Mambembe said some of their members would travel to the law courts in Nairobi on Wednesday to initiate legal action against the Minister.

“We will go to the High Court tomorrow to file the case against Mr Michuki. He is not above the law and we will take him to court where we expect his directive to be reversed,” Mr Mambembe said.

During a tour of the port in September, Mr Michuki directed that the agents would be required to transact their business from their business premises outside the port beginning November 1.

Mr Mambembe told Capital Business they were opposed to the directive and would withhold tax revenues until the order is revoked.

“The port belongs to the agents. We have been included in the Management Act and the Minister can’t change the Act unless he takes it before Parliament for amendment,” he added.

He also took issue with Commissioner of Customs Services Wambui Namu for warning that the Kenya Revenue Authority (KRA) would de-register agents who failed to comply with government’s directive.

Mr Mambembe argued that the Commissioner had no powers to impose any sanctions on them as they had not committed any offence.  He said they had a right to keep an eye on their goods during the verification and clearing process.

“She should not be issuing threats. Instead, she should call bona fide national officials for a meeting on the way forward,” he added. 

At the same time, Mr Mambembe claimed that they had ousted their National Chairman Mr Gerald Kagumo who earlier on Tuesday held a press conference with Mrs Namu and expressed their support for the directive.

During the media briefing, Mr Kagumo blamed a protest on Monday on a communication breakdown and denied that there was a rift among the members.

“Mrs Namu should not be appearing at media briefings with officials whom we’ve fired. We have already appointed Mr Peter Otieno to be the acting National Chairman until we find a replacement,” Mr Mambembe added and claimed that the people who were with Mr Kagumo during the meeting were not registered members.

Mrs Namu was adamant that the directive was in force and said it was aimed at enhancing the level of integrity and efficiency at the port.

During Monday’s protest, some KIFWA officials incited others not to remit revenue collected from their clients until the order was rescinded.

However, while reminding the agents that paying taxes was mandatory, the Mrs Namu downplayed the impact of strike on their tax collections for the day saying her department collected Sh575 million in import taxes while 2,925 transactions were lodged with the Simba system and that 1,851 were processed.

“We wish to reiterate that payment of taxes is a legal obligation and is therefore not optional. It is important for those agents to note that they do not have a right to withhold tax revenue that legitimately belongs to government,” she warned and pointed out that there was a clear indication that their action did not enjoy the support of many of their KIFWA members.

She cautioned the agents against withholding tax adding as it would harm port users and regional countries that rely on the port.  She said it would also reverse the gains made in decongesting the port.

Mrs Namu advised the business community to deal with compliant agents saying a delay in remission of taxes due would attract penalties.

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