Home Kenya News Here’s what you need to know about Kenya’s new Cargo Railway Centre

Here’s what you need to know about Kenya’s new Cargo Railway Centre

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Kenya’s new Cargo Railway Centre

The National Cargo Deconsolidation Centre is a facility that was launched by President Kenyatta in November 2020 with the purpose of enhancing trade facilitation for small-scale importers.

The facility is used for deconsolidation and clearance of goods imported by Small Scale Traders.

The facility is operated jointly by Kenya Revenue Authority (KRA) and the Kenya Railways Corporation (KRC) and has provided offices to the associations of Small-Scale Traders as well as consolidators.

KRA commissioner-general Githii Mburu talked to the Star about the cargo railway centre.

What is the National Cargo Deconsolidation Centre and how does the facility work?

The National Cargo Deconsolidation Centre is a facility that was launched by President Kenyatta in November 2020 with the purpose of enhancing trade facilitation for small-scale importers. The facility is used for deconsolidation and clearance of goods imported by Small Scale Traders.

The facility is operated jointly by Kenya Revenue Authority (KRA) and the Kenya Railways Corporation (KRC) and has provided offices to the associations of Small-Scale Traders as well as consolidators.

The Small-Scale Traders come together and purchase goods from China, Dubai, and other export countries. Since they cannot fill a container individually, the goods are taken to consolidators who are Kenyan businesspeople operating consolidation businesses in those exporting countries.

The consolidators pool the goods together to fill a container which they ship to Kenya. The goods within the container are labeled with details of each importer (Small Scale Traders) for ease of identification during the removal of goods from the facility.

Upon arrival at the Deconsolidation Centre, the consolidators pay the taxes on behalf of the traders following which the containers are opened and the goods stored in the facility with details of the container number, name of the importer (Small Scale Trader), and the consolidator who has brought in the container. Each small-scale trader then collects his/her goods from the facility using any means of transport including Mkokotenis, pick-ups, trollies.

What challenges did the facility seek to address?

Previously, the traders faced challenges including:

Delays in the clearance of goods due to interventions by various Government Agencies: This has been resolved in that goods are loaded after inspection abroad and there is no further intervention when the goods reach Kenya except payment of taxes. The Government has emphasized that the Kenya Bureau of Standards (KEBS) and Anti-Counterfeit Agency (ACA) should ensure that they do their work before the goods are loaded to come to Kenya. This will ensure substandard and counterfeit goods are not allowed to leave the countries of export.

Previously, goods would be delayed where a container was found to have one or more consignments of substandard or counterfeit goods. It would mean that where one trader brought goods that did not meet the requirements of the standards, the entire container would be detained at the port thus affecting all the other traders. With this deconsolidation facility, the offending goods can be isolated and the rest of the goods released to their owners in an expedited manner.

Uncertainty in the taxes to be charged on the goods: This has been resolved by ensuring containers of consolidated cargo are charged at a standard rate per container.

Currently, it is Sh2.2 million per forty-foot container. This rate is usually reviewed from time to time by KRA based on the market prices of goods. The revisions are however consultative and there is proper communication before the rate is adjusted. One forty-foot container is expected to carry 70 ‘CBM’ (a measure of space in the container). It is, therefore, possible for a trader to know how much tax he/she is paying since he/she is charged by the consolidator based on the ‘CBM’ his/her goods occupy in the container. Taxes charged per one CBM should therefore be approximately Sh31,500. It is therefore easy for traders to know whether they are being overcharged by the consolidators.

Failure by consolidators to provide importers with documents to enable them to claim expenses and taxes paid: Previously, small-scale importers would just collect their goods at the facilities owned by consolidators without receiving documentation that they can use to claim their expenses. This has now changed and importers are now able to get important documents that they can use for tax purposes.

Consolidators could withhold the goods unnecessarily and frustrate the small-scale importers: This has been addressed in that the small-scale importers now collect their goods directly from KRA/KRC facility without any delay. They are only taking one to two hours to get their goods. If the importer has any issue with the consolidator, he/she will raise it with KRA or KRC officials managing the facility since consolidators are regulated by KRA and KEBs. So far, there hasn’t been any dispute or issue with the consolidators.

How many containers have been cleared through the facility and what is the quantum of taxes collected?

From November 2020 when the facility was launched, we have cleared 1,021 Twenty Foot’s equivalent of containers and collected Sh1 billion in taxes. It is important to note that these containers have been cleared in a very expedited manner and without any frustrations of traders that would result from multiple interventions from various Government Agencies.

The facility can handle approximately 20 containers at ago and has space for future expansion to meet the needs of the business. We have also allocated offices to consolidators to make it easier for them to facilitate faster clearance of goods for their clients.

-The-Star

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