Jacinta Obore Mirembe
A 4-team delegation from Kenya Revenue Authority(KRA) has concluded a benchmark on self-managed customs bonded warehouses under the Authorized Economic Operator(AEO) program.
During the two days’ visit, the delegates learned about the Bonded Warehouse Information Management System, its effects on tax compliance and tax evasion prevention, software and connectivity, the effectiveness of revenue collection, and trade facilitation, among other things.
They also visited self-managed bonded warehouses including CFAO Motors, Uganda Baati Ltd., Transpaper Uganda Ltd., and Euroflex Uganda Ltd. to observe how Customs oversees and maintains them.
Charles Rumanyika, Manager Customs Audit in URA explained to the delegation how URA effectively manages the Authorized Economic Operator(AEO) saying, “We have 24/7 access to their facilities via CCTV cameras and we conduct periodic audits on these companies.”
This would not only guarantee the safety of customs, but it will also enable AEOs to keep an eye on themselves, enhancing their proficiency and compliance and enabling them to raise their future income contribution from 33% to 60%.
Prior to their onboarding, Abel Kagumire, the Commissioner Customs Department, stated that compliance checks are done on the AEOs.
“We have a measure of trust in self-managed bond owners since they have undergone our inspection and testing to ensure that they are in accordance with domestic tax laws as well as customs requirements before we grant them permission to operate. As a result, we are aware of where to look for problems if they arise,” he said.
Caroline Wambua, the Manager of Business Transformation at KRA, thanked URA for agreeing to their request to conduct a benchmarking study on the self-managed customs bonded warehouses, stating that the exercise was motivated by a discussion with one of their stakeholders.
“We visited some of our stakeholders in order to better our business procedures. CFAO Motors was one of them, and they let us know that URA allows them to self-manage their bond. We now need to learn how to lessen the risks that come with this undertaking. Therefore, our benchmark visit intends to help Kenya create a comparable strong and effective AEO program,” she said.
URA’s AEO program currently has 118 members who enjoy a number of benefits such as priority to participate in Customs initiatives, self-management of customs bonded warehouses, choice of place of physical examination of cargo, faster clearance among others.
URA recently increased these benefits by signing Mutual Recognition Agreements (MRAs) with China, India and recently the South Africa Revenue Service. This means that all companies in the AEO program will enjoy favorable trading conditions in these countries.
