Common Customs bond in East Africa will to reduce costs

Importers in East Africa will from July, operate under a common Customs bond, to guarantee uniform import duties and taxes across all partner states.

Currently, the value of Customs bonds varies from country to country because of the application of different duty rates, valuation and sensitivity of goods.

Kenya requires importers of transit goods to secure a Customs bond issued by an insurance company, while delicate or sensitive cargo requires a bank or cash guarantee. In Uganda and Rwanda, the Customs bond is issued by an insurance company with rates based on the taxes charged by the destination country.

According to the East Africa Community Single Custom Territory Monitoring and Evaluation Committee, the common Customs bond will reduce the cost of doing business and goods turnaround time.

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This common Customs bond is expected to be adopted during the Council of Ministers in July as part of the pillar to create a Customs Union. It is meant to create a level playing field for the region’s producers by imposing uniform competition laws, Customs procedures and external tariffs on goods imported from countries outside the EAC.

To secure cargo movement in the region, revenue commissioners from Kenya, Rwanda, Burundi, Tanzania and Uganda in attendance, say they are already implementing cargo tracking systems and before the end of this year, there will be one data control centre to monitor and track cargo.

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The new data control centre involves computerisation of all Customs systems and it will help in enhancing online tools, which include a regional dashboard, transport observatory system and a geographic information system.

A regional cargo tracking system is already operational on the Northern Corridor and has reduced cargo loss to close to zero in 2019.

According to the committee, the EAC secretariat in collaboration with Trade Mark East Africa and other partner states particularly the Tanzania Revenue Authority (TRA) are looking into the possibility of interfacing the TRA Electronic Cargo Tracking System (ECTs) platform with existing ECTS systems along the central corridor.

Kenya Revenue Authority regional co-ordinator Southern Region Kenneth Ochola said they are setting up internal mechanisms in consultations with the Kenya Bureau of Standards to monitor compliance.

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