KRA rolls out new system to curb tax cheats and improve efficiency

Kenya Revenue Authority (KRA) will this month roll out a new cargo clearing system to replace the over one decade old Simba system in a move that is expected to improve efficiency. The system, which has been developed since last year is being financed by the TradeMark East Africa (TMEA) at the tune of Sh 1.1 billion.

With effect from 25th October 2017, all import Declaration Forms (IDF) will be submitted and processed on Integrated Custom Management System (iCMS), KRA announced in a recent notice.

“All Air Cargo Manifests and Customs Declarations for cargo arriving on or after 6th November 2017 shall be submitted and processed on iCMS. All Sea Cargo Manifest and Customs Declarations for sea/ road cargo arriving on or after 13th November 2017 shall be submitted and processed on iCMS “the notice read in part.

iCMS, according to KRA is a robust intelligent system that consolidates all customs cargo clearance processes to one point of access to improve customers’ experiences. The new system once up will simplify and automate customs procedures leading to an improvement in administrative efficiency and pre-clearance of imports and exports.

“It will be a boon for importers and exporters in that it will reduce the time taken to clear imports and exports by at least 60%,” TMEA said earlier, adding that other gains include the ability to pre-lodge 80% of customs documents, a linkage to the National Single Window System to reduce complexity for traders in obtaining official approvals and streamlining of processes between Kenya and other revenue authorities in the region.

“The common mwananchi can also expect to benefit from the new system in the long run in that few delays in the clearing of imported goods will lead to lower shop prices of the commodities. Currently, storage costs incurred by importers due to delays in clearing goods are passed onto consumers in the form of higher prices,” TMEA said.

The lower turnaround time for clearing of goods will make Kenya the entry point of choice to and from the regions landlocked countries which translates to higher revenues for the government thus enhancing their ability to provide public goods and services.

Simba System that is currently is used in the clearing of imports by customs agents, is no longer tenable as it has glaring loopholes that rogue agents exploit to evade paying duty. KRA Commissioner for Customs and Border Control Julius Musyoki mid this year said the system also experiences prolonged downtime, leading to delay in movement of cargo from the port of Mombasa.

He said the new system will be fitted with special features to carry out an automated evaluation of the value of cargo to help address the perennial challenge of cargo under-valuation. Other benefits of the new system include the ability to integrate to the Regional Electronic Cargo Tracking Platform.

The platform, which has already been agreed by Kenya, Uganda and Rwanda, uses one system that enables all countries to monitor the movement of cargo from the Mombasa Port to its final destination.

“This approach will eliminate the opportunities presently exploited by tax evaders at the changeovers of seals at border points by having only one common seal and joint enforcement teams to police transit cargo operations,” said Mr Musyoki.