The Kenya Revenue Authority (KRA) has announced a significant improvement in the efficiency of its customs operations, particularly in the reduction of time taken to release goods from ports. Over the past three years, KRA has successfully reduced the average time required to clear goods at the Port of Mombasa, Inland Container Depots, and Kenya Railways Corporation Sheds from 112.6 hours (approximately 4.7 days) to 51.43 hours (approximately 2.1 days). This represents a remarkable 54 percent decrease in the duration of the customs clearance process.
This achievement is a testament to the efforts made by KRA to streamline and modernize its operations, primarily through the adoption of advanced technologies and the enhancement of its customs management systems. One of the key drivers behind this improvement is the increased adoption of Pre-Arrival Cargo Processing (PCP), which has seen its uptake grow from 25.28 percent in the 2021-22 financial year to 40.55 percent in the 2023-24 financial year.
Pre-Arrival Cargo Processing and Enhanced Systems
The introduction and growing adoption of Pre-Arrival Cargo Processing have played a pivotal role in reducing the time taken to release goods. The PCP system allows for the processing of customs declarations before the cargo arrives at the port. This system is supported by the Customs Integrated Customs Management System (iCMS), which enables the declaration of customs entries using the bill of lading as the base document. As a result, customs processing can begin even before the physical arrival of goods, significantly reducing the time required for clearance.
In addition to the PCP, KRA has implemented several other measures to enhance efficiency. One such measure is the requirement for all goods arriving at Kenyan ports to be inspected at the port of origin. This pre-export inspection is carried out by licensed inspectors appointed by the Kenya Bureau of Standards (KEBS), who issue a Pre-Export Certificate of Conformity. This certificate strengthens risk management by ensuring that goods meet the required standards before they arrive in Kenya, further streamlining the clearance process.
Integration with KenTrade’s Trade Facilitation Platform
KRA’s integration with KenTrade’s Trade Facilitation Platform has also been instrumental in enhancing the efficiency of the customs clearance process. This integration facilitates the seamless sharing of critical information, such as import declarations and supporting documents, among various Partner Government Agencies (PGAs). As a result, the issuance of licenses and permits has become more efficient, with reduced human interaction and fewer unnecessary office visits by importers and customs clearing agents.
This seamless integration has led to a significant improvement in KRA’s service delivery, allowing for faster processing times and increased transparency in the customs clearance process.
Impact on Revenue and Economic Performance
The efficiency-enhancing measures implemented by KRA have had a positive impact on the Authority’s revenue collections. During the 2023-24 financial year, KRA recorded a 4.9 percent increase in customs revenue, amounting to KSh791.368 billion. This increase was driven by a 10.3 percent growth in oil taxes, which reached KSh300.77 billion, and non-oil taxes, which totaled KSh490.6 billion.
Furthermore, KRA’s Customs Department reported an 11.7 percent rise in the value of imports. This increase in import values includes the charges paid for insurance, excise duty, freight charges, and other incidental costs. Despite the rise in overall import values, the performance of oil and non-oil taxes was partly affected by a 23.8 percent increase in exemptions and remissions, particularly for food commodities. These exemptions were granted to mitigate the adverse effects of drought and reduce the cost of living.
Conclusion
The Kenya Revenue Authority’s efforts to reduce the time taken to release goods from ports have yielded significant results, cutting the average duration from over four days to just over two days. Through the adoption of advanced technologies, enhanced customs management systems, and strategic partnerships, KRA has improved the efficiency of its operations, leading to increased revenue collections and contributing to the overall economic performance of the country. As KRA continues to implement and refine these measures, further improvements in customs efficiency and service delivery are anticipated.
