28/03/2014
The Kenya Revenue Authority is working on a plan to ensure speedy clearance of goods in the region. Once in place, the authorised economic operator (AEO) system is expected to eliminate delays of clearance and delivery of imports. This refers to a special category of institutions that include importers, clearing agents, and transport companies that are not required to wait for cargo inspection at the port, as is the case with the bulk of other companies.
The Kenya Revenue Authority is working on a plan to ensure speedy clearance of goods in the region. Once in place, the authorised economic operator (AEO) system is expected to eliminate delays in delivery of imports.
This refers to a special category of institutions that include importers, clearing agents, and transport companies that are not required to wait for cargo inspection at the port, as is the case with the bulk of other companies. Instead, they enjoy a post-clearance audit once their goods have been removed from the port.
The project is envisioned to offer relief to consumers of both imported and manufactured goods as it will lead to reduction in prices that have previously been inflated to absorb unnecessary delays and costs incurred during importation.
Speaking to Smart Company on the sidelines of the launch of a logistics performance index report prepared by the Kenya Shippers Council, KRA’s deputy commissioner for customs services, Mr Jonah Cheruiyot, said the taxman hopes to start piloting the project by October.
“Testing of the project is expected to be carried out before the end of the year. Similar standards as those being employed in Kenya will be used to vet the companies to qualify for the system,” said Mr Cheruiyot.
The authorised economic operator system was adopted in Kenya in 2006 as part of reforms by KRA that undertook to reduce the number of days that cargo takes before it is cleared. However, even with the undertaking, the revenue body has often been blamed by other state agencies for delays of cargo, which importers and other industry players say negatively affects their business.
According to the Kenya Association of Manufacturers (KAM), the ripple effects of a fully implemented AEO system would result in benefits across the import and manufacturing chain and eventually trickle down to consumers.
“AEOs will definitely solve the challenge of delays in supply that we have been experiencing. As a result, companies can enjoy efficiency which will lead to a reduction in prices of goods and services,” said Ms Betty Maina, the CEO of the KAM.
Since its introduction, the Kenyan version of the authorised economic operator system has attracted membership from 64 companies, according to data from KRA.
