Kenya to streamline Uganda, Rwanda customs, job losses feared

Wed Jul 24, 2013 11:35am EDT

Related Topics

* New system to speed up cargo movement, cut tax leakage

* Uganda, Rwanda to deploy own agents at Mombasa port

* Kenyan clearing companies fear thousands of job losses

By Joseph Akwiri

NAIROBI, July 24 (Reuters) - Kenya said it would cut red tape holding up millions of dollars of imports into its landlocked neighbours Rwanda and Uganda, by letting the countries collect customs on goods as they arrive in its port at Mombasa.

Goods can currently face long delays as agents process the paperwork to release cargoes from warehouses at east Africa's biggest port, and later make separate arrangements to pay import duties at Kenya's borders with Uganda and Rwanda.

Tax officials said the new system, due to be introduced in August, would clear inefficiencies and blockages seen as a major barrier to trade in the region.

But clearing agents in Kenya said it could also cost thousands of jobs in warehouses, freight firms and almost 700 clearing and forwarding companies operating in the country.

Kenya, Uganda and Rwanda, together with Burundi and Tanzania, are members of the regional East African Community trade bloc, with a joint gross domestic product of $85 billion.

Kenyan tax officials said the new system would allow a "seamless flow of goods" and make it easier to stop goods getting through the system without customs payments.

"Once cleared at the port, there will be no stoppages at borders and checkpoints along the corridor," the Kenya Revenue Authority's commissioner of customs, Beatrice Memo, told a news conference.

Under the system, Rwandan and Ugandan clearing agents and customs officials would be able to set up their own offices to clear cargo and collect taxes directly at the port.

The Kenya International Freight and Warehousing Association said that meant up to half a million jobs could be lost to Uganda and Rwanda.

"The Government has not consulted us ... and we totally reject it," Association chairman Boaz Makomere told Reuters. (Editing by George Obulutsa and Andrew Heavens)

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