Presentation on theme: "KENYA REVENUE AUTHORITY"— Presentation transcript:
1 KENYA REVENUE AUTHORITY CUSTOMS SERVICES DEPARTMENTAUTHORIZED ECONOMIC OPERATORNEGOTIATION GROUP ON TRADE FACILITATION (NGTF)GENEVA SWITZERLAND9TH -13TH JULY 2012BY JONAH CHERUIYOT
2 Introduction This presentation covers the following Definition of CustomsThe AEO Concept in line with Customs BusinessOperationalisation of the AEO programExisting Opportunities and benefitsChallenges
3 What is Customs ?Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling administration of the international movement of goods .Pillars of Customs;Trade facilitationRevenue collectionProtection of society( Security)Collection of trade statistics
4 THE AEO Release IDF BANK DPC RML(MANIIFEST) SHIPPER AEO OFFICE RELEASE POINTCLIENT READY TO TAKE DELIVERYEXIT POINT
5 Existing Opportunities Mutual recognition : the increasing globalization of sourcing, production and sales means that most companies are dealing with customs and trade requirements in several markets- accountability expansion beyond cross border requirements, hence the need for faster clearance of cargo.Business Predictability and planning: Enrollment into the program is a guarantee that you will operate within the set rules. This is in line with general worldwide trend to tighten rules and other requirements and penalize non compliance. Failure to plan ahead may lead to border delays, hence production and delivery deadlines.
6 Existing Opportunities Cont. Information Exchange. Seamless information exchange between taxpayer and customs facilitates intelligence driven risk management hence few post arrival interventions .( The upgrading of seamless systems within East African Partner States ,i.e RADEx,Ascud ++ and SIMBA system will go along way in allowing the Region to see and communicate well with each other on the side of imports and exports likewise.Exports: Inclusion of exports into AEO, gives assurance and confidence to the receiving Administration hence similar benefits will be enjoyed in the importing country.
7 Existing Opportunities Cont.. Enhance competitiveness and safe investment destination: In a global economy, the speed and certainty of crossing the border, and importing and exporting goods are vital for Kenya’s Competitiveness, hence attracting foreign investments.
8 AEO Implementation in Kenya The AEO program was piloted in Kenya in the Year 2007/08 with twelve selected companies by pairing Importers/exporters and licensed Customs Clearing Agents who have over a period of time proven to be reliable taxpayers and partners of Customs Services Department.By 2nd December 2010 the program was fully operationlised as a Unit.Currently the total number of AEO are 64 (40 Importers/Exporters and 24 Clearing Agents) . We are in the process of expanding the program to increase the number to at least 100 Opertors in this Financial Year 2012/2013. include other players i.e. Transporters, Warehouse Keepers, Oil marketers, Shippers, Customs Freight Stations (CFSs) and Shed Operators.
9 AEO Implementation in Kenya Cont. The AEO Office undertook to sensitize all Customs staff and stakeholders including other Government Agencies on the operation of the programThe AEO companies are subjected to annual audits by Post Clearance Audit (PCA) Unit. The program so far has helped in raising the compliance levels in declarations and payment of correct duties and taxes.We therefore envisage an improvement in the Facilitation of legitimate trade, high compliance levels and increased revenue collection.
10 Selection CriteriaThe application form is vetted upon submission by a selection committee comprised of senior managers from the Customs Services Department based at the Headquarters. The managers are drown from Valuation &Tariff unit, Document Processing Unit (DPC),BONDS section,ICT,Programs division, Post Clearance Audit (PCA),Project unit and AEO Office.Accreditation procesStage 4No objection from other Govt. AgenciesStage 1Application Form ScrutinyStage 2Site visit & ValidationStage 3No objection from Customs Divisions, Regions & KRA Depts.Stage 5Commissioner’s Approval
11 Benefits to Business Simplified procedures (speed, reduced costs etc.) Predictability (hence better ability to plan the logistics in advance)Enhanced level of voluntary complianceRecognized as a trustworthy and transparent partner within the supply chain in the regionMarket access within the EAC regionMutual recognition within the regionImproved reputation and customer loyaltyAEO as a criterion for partner selectionImproved dialogue with Customs
12 Benefits to Customs Exchange of timely and accurate information Improve control and better allocation of resourcesCustoms reform – willingness for changeMutual recognition, trust and capacity building within the EAC Customs administrationsReduced compliance costsReduction of red-tapeImproved transparency, governance and integrity (Customs-Customs & Customs-Trade)
13 Benefits to Government Trade GrowthIncreased revenueAttract foreign investmentsRecognized as a trustworthy trading regionImproved safety and security within the supply chainImproved intergrity, relationships among the stakeholders and good governance)
14 ChallengesLow level of understanding of the program by other Government Agencies and stakeholderInformation sharing within the Departments and other Government Agencies