Kenya, Rwanda and Uganda will jointly attach electronic seals onto cargo at Mombasa.
Rwanda has joined its counterparts in Kenya and Uganda to adopt the Regional Electronic Cargo Tracking System (RECTS), which connects the electronic cargo tracking systems of the three countries.
The Northern Corridor Heads of States directed the implementation of the system in 2014 to improve tax collection and facilitate cargo handling and data through advanced technology along the corridor.
The regional cargo tracking system was to be adopted by Kenya, Uganda and Rwanda from January this year to end dumping of goods in the Kenyan market that leads to tax evasion. The tracking system is also meant to reduce the incidences of theft of transit cargo that has increased in the recent years.
The RECTS which was commissioned by the Rwanda Revenue Authority (RRA) enables them to jointly and seamlessly track cargo from port to destination on a twenty-four hours basis.
It is expected to enhance cargo security and transparency as well as reduce transit time and cost of transportation.
Through RECTS, Kenya, Uganda and Rwanda will seal loopholes that result in loss of revenue due to the diversion of untaxed goods into the market and eliminate the need for physical escort and monitoring of sensitive cargo such as batteries, fuel and cigaretters.
The RECTS has been supported by the United Kingdom Department for International Development (DFID) through TradeMark East Africa (TMEA).
“The UK is truly excited about the role that the RECTS will have in reducing the cost of doing business across East Africa and harnessing Rwanda’s trade potential,” Sally Waples, DFIF Rwanda said.
The upgraded system was successfully piloted by the Uganda Revenue Authority (URA). It was supposed to be implemented in June 2016 but delays in negotiations saw the deal pushed forward. On implementation, Kenya, Rwanda and Uganda will jointly attach electronic seals onto cargo at Mombasa.
Kenya Revenue Authority (KRA) last year said a central command centre would be established in Nairobi and 13 rapid response stations established throughout the country to act on any incident.
The Ugandan system will also be integrated with the Rwanda Revenue Authority ECTS which was also developed by the Malaysian firm to give a single view of cargo and customs control to all the revenue authorities.
Each country previously had separate cargo tracking systems, presenting loopholes due to lack of seamless monitoring.
The seals used on the joint electronic platform will be offered as a free service to importers, exporters, clearing agents and transporters conveying goods on the Mombasa-Kampala-Kigali highway.
The KRA said that after the first three years of implementation “a decision will be made on the way forward” with regards to the cost of the seals.
Theft of the imported cargo in Mombasa and along the Mombasa – Malaba highway reached an alarming proportion in late 2015 with the industry players accusing a well-coordinated syndicate.
So complex was the cartel that the perpetrators were able to offload part of the consignment from the transit containers. Trucks ferrying transit containers were mandatorily required to install an Electronic Cargo Trucking System (ECTS) that was monitored by KRA.
“Pilferage can only be done when the content of a container is well known. And for this to happen, there must be some element of collusion by those handling it. Also, there are other logistical challenges such as finding a convenient location that the goods can be offloaded,” Kenya Transporters Association (KTA) chairman Mr Kiprop Bundotich said in an earlier interview.
Although the region has embraced a Single Customs Territory (SCT), requiring the payment of the taxes at the point of entry, the region does not employ a uniform tariff and taxes on isolated goods are levied at different rates in member countries. This, according to Bundotich makes it attractive for unscrupulous traders to import goods as destined for Uganda, pay duty to the Uganda government and exploit the weak monitoring system to dump the goods in the local market.