Planned Sh1.2bn tax system faces delays
What you need to know:
- Plans to replace Simba - an old customs system for revenue collection - with the new platform meant to automate customs and revenue collection processes, began last year.
- Some players had also indicated that with implementation of the ICMS, Kenya could potentially lose track of movement of goods and massive clearance levies if the system is not supported by tamper-proof customs management practices.
A bid by the Kenya Revenue Authority (KRA) to implement a Sh1.2 billion customs management system for revenue collection could be derailed following complaints raised over short-listing of two firms to carry out the project.
The authority, which was to appear before the Parliamentary Investments Committee (PIC) for a second time to answer questions over the tendering process, had pre-qualified Webb Fontaine and Bull to supply the Integrated Customs Management Systems (ICMS) meant to facilitate regional trade.
Sources now indicate that the appearance scheduled for last week was suspended “indefinitely”.
The project is financed by TradeMark East Africa (TMEA) and the government.
Plans to replace Simba - an old customs system for revenue collection - with the new platform meant to automate customs and revenue collection processes, began last year.
Mr Dennis Kashero, TMEA communications director declined to comment on the matter. “We cannot comment on the process now as it is still before the PIC,” he said last Friday. A whistle-blower had sought to have the Public Procurement Oversight Authority disqualify two firms from bidding.
LOSE TRACK
Some players had also indicated that with implementation of the ICMS, Kenya could potentially lose track of movement of goods and massive clearance levies if the system is not supported by tamper-proof customs management practices.
The KRA did not comment on the matter only saying it is currently the subject of parliamentary investigation.
However when KRA commissioner general John Njiraini appeared before PIC last month, he defended the process saying it would increase efficiency in revenue collection and enhance trade.
ICMS is touted as a dynamic risk-based means of controlling and monitoring imports and exports and is expected to raise levels of compliance by traders.
Its implementation is also meant to remove the need for physical paperwork, raise efficiency in cargo clearance, safeguard revenue and reduce the cost of doing business in East Africa.
Last year, audit firm PwC said although a change from Simba to an integrated custom management system would be costly to the government, the benefits derived from EAC integration would supersede the expenses and eventually be worthwhile for both the government and individual traders.
