Container Freight Stations that do not follow new requirements risk closure, Kenya Revenue authority has said.
Recently Kenya Revenue Authority (KRA) has been streamlining operations of Container Freight Systems (CFSs) in a bid to stem tax evasions.
The process started in the later part of 2015, was aimed at strengthening governance process over CFS operations and culminated in the publications of new rules to govern CFS operations vide Gazette Notice No. 8791 November 2015.
“The results of the exercise may lead to various outcomes, including suspension of licenses of the non-conforming CFSs, where breaches committed are of a serious enough nature to warrant such action.”
Already licenses of two CFSs, Portside and Autoport, have been suspended and the grounds for such action have been provided in the letters communicating the decision and signed by the Commissioner of Customs & Boarder Control.
“Suspension of licenses for Custom Bonded Facilities is an action routinely used to enforce compliance with Customs requirements,” KRA Commissioner General John Njiraini said in a statement on Monday.
The ongoing operations which started early January and are expected to continue until March, are part of a wider operation to administer custom regulations and close any possible revenue leakages, Mr Njiraini stated.
The initial part of the exercise involves the collection of data about existing SFSs and assessment of their performances in varied respects including, in respect of compliance with tax requirements.
Mr Njiraini noted that the recent investigations have shown that some CFSs are involved in actions that abet tax evasions. These acts include facilitating the importation of contraband goods including sugar, rice, ethanol, and other highly sought after commodities.
According to KRA, facilitating the importation of contraband goods directly undermines Government objectives to promote consumption of Kenyan grown products. Moreover, abetting diversion of transit cargo, directly undermines revenue collection, besides undercutting businesses that adhere to transparent business practices.
In addition to suspending registration of new clearing and forwarding agents, KRA has also threatened to withdraw more licenses of rowdy CFS operators.
“Further actions will be taken in respect of CFS installations found to be in breach by engaging in transit diversion, smuggling and other fraudulent practices,” said Mr Njiraini adding that KRA will continue tightening Customs enforcement through staff skill enhancement and the hiring of staff with relevant knowledge in law enforcement.
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