Second hand dealers lament new KRA duty

(Photo Courtesy)

Traders have protested against the introduction of a Sh500,000 standard duty on all imported second-hand cargo at the Mombasa port.

The Kenya Revenue Authority (KRA) says it introduced the standardised duty to fight under-valuation of goods by importers.

Under the new rule, importers will pay the duty for every 20-foot container of second-hand items and Sh1 million for a 40-foot container.

But the rule has elicited protests from clearing and forwarding agents and importers.

“We are not happy with the new directive that importers should pay the same duty for all imported second-hand items,” said Rank Network & Logistics Director Clement Ngala.

The agents complained that the introduction of the duty would kill the second-hand imports business.

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The importers also complained that valuation of goods before release from the port to the importers in Mombasa was taking too long.

Julius Musyoki, a customs official, said under the new rule, all second-hand items of similar weight and value would be ranked together.

“The Commission of Custom and Border has decided to standardise the duty on some imported items to harmonise the charges on imported goods of similar weight to fight under valuation,” he said.

Mr Musyoki however said the commission had not standardised the minimum duty on second-hand imports because that was not within its mandate.

Mr Ngala also protested against what he viewed as hindering bureaucratic procedures during valuation of imported second-hand goods at the port.

He said the back-and-forth between customs officers and their bosses slowed down clearance of imported goods at the port.

“Most valuation officers cannot assign value for goods until they share what they had valued with their bosses. This means the bosses have no faith in them and when they are not there, no goods can leave the port,” said Ngala.

He added: “Traders in second-hand items will find it difficult to sell their goods in the market after paying a duty of Sh1 million on goods, which sometimes are of low quality.”

Valuation data

He suggested that valuation data should be made public so importers can share the information with the customs officers instead of keeping such information secret.

Clearing and forwarding agents demanded the removal of bottlenecks that hindered the fast-tracking of valuation process for imports.

“All customs officers are fully trained to do valuation. I do not see why they must first share the valuation they had made with their bosses,” said Ngala.

The agents also faulted the revenue authority’s valuation department, which they want scrapped and its work allocated to trained customs officers.

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