NAIROBI, Kenya, Jun 25 – Kenya could be losing billions of shillings in term of tax revenues owing to bureaucracy at customs which is encouraging illegal importations.
According to DHL’s Country Managing Director Alan Cassels, clearance of goods at various points of entry including Mombasa port and airports is still taking up to six days, hence frustrating traders.
Cassels is calling on the government to ensure this is reduced as promised by President Uhuru Kenyatta to less than three days and encourage easier movement of goods.
“If you make life very difficult from a bureaucratic point of view with paper work, I use the analogy of water that has to reach the dam; the water will find its way downhill somehow. And this is what happens, if you make it very complicated, there will be informal ways in which people will do it,” he says.
He argues that despite heavy investments on infrastructure at the port of Mombasa and airports, “bureaucracy is still suffocating businesses.”
Apart from the time wasted while getting clearance, Cassels laments that traders are also being subjected to numerous charges of up to six different type of fees which contributes to high cost of imported goods in the country.
Some of the charges include Import Duty, VAT, what he terms as government fees, Kenya Airport Authority (KAA) fee, Kenya Bureau of Standards (KEBS) and the newly introduced 1.5percent Standard Gauge Railway levy.
“What happens is that your Sh3,000 items now becomes Sh12,000 item at the end of the day and that is before you pay for any transport. So what this means, one will prefer flying to Dubai, put a lot of stuff the suitcase and bring them here and the chances of you being stopped at the customs is very slim,” he says.
He says apart from discouraging investors to come and do business in the country, Kenya is also losing in terms of revenue as well as increasing the prices of goods for the end consumer.
Meanwhile Cassels says high investment in technology will play a great role in smoothening clearance at the points of entry where importers could be fulfilling a lot of requirements online and avoid backlog.
“We must look for a way to avoid a lot of human interactions. This is not only easier but it also minimizes any cases of corruption,” Cassels argues.