Revenue authorities of Uganda, Kenya and Rwanda have begun preparations for the implementation of a Single Customs Territory (SCT) aimed at reducing the cost of doing business across the borders.
SCT will see taxes of goods transported through East African Community member countries collected at one point. The Revenue Commissioners of the three countries came to a consensus that the port of Mombasa will be the collection point.
The process of initiating SCT follows the EAC Heads of State Summit in April 2011 that directed the Council of Ministers to do a feasibility study for the attainment of a Single Customs Territory.
In its finding the council reported to the Heads of state who on 25th June 2013, held a Tripartite Summit here in Entebbe and directed among other things the collection of customs duties by Uganda and Rwanda before goods are released from the port of Mombasa.
For the goods destined for warehousing, importers would continue remitting security bonds.
Allen Kagina, Uganda Revenue Authority (URA) Commissioner General, explains that with the SCT, assessment and payment of taxes on goods will be done at the destination, while verifications may be made at the port and relayed electronically to relevant authorities to facilitate the release of goods.
Although Tanzania and Burundi are not yet party to the agreement, the move is aimed at ensuring that taxes are assessed and collected at country of destination before the cargo moves out of the port.
URA’s Assistant Commissioner for Customs, Dickson Kateshumbwa, says the initiative is envisaged to reduce clearance costs and multiple bonds on goods, eliminate checkpoints along the Northern Corridor, ensure seamless flow of goods and increase revenue collection through easier payment systems.
It is expected that once SCT becomes operational, it will be at par with other customs unions such as the South African Customs Union and the European Union.
The union is supposed to facilitate the elimination of restrictive regulations such as Non-Tariff Barriers (NTBs) as the corridor becomes one region for customs purposes. This means that goods can move across the borders with minimal controls.