Kenyan businesses are set to receive a major boost if the proposed 50 per cent reduction in the $10 (Ksh 1,290) Unique Consignment Reference (UCR) fee per Import Declaration Form (IDF) is adopted.

Proposed by the Kenya Trade Network Agency (KenTrade), the change that could significantly lower export costs will serve as a bold move to enhance Kenya’s trade competitiveness that had started to fizzle.

 The announcement was made during a consultative forum in Nairobi co-hosted with the Kenya International Freight and Forwarding Association (KIFWA). Speaking during the event, KenTrade CEO David Ngarama said the draft National Electronic Single Window System (Fee Reduction and Exemption) Regulations were developed with the Ministry of National Treasury and Economic Planning.

 High taxation

The National Electronic Single Window System Act, 2022 (NESWS Act) was enacted by the Kenyan Parliament on June 21, 2022. This Act formally governs KenTrade’s operations, solidifying its role in managing and operationalising the Trade Facilitation Platform (TFP) to enhance trade efficiency and transparency in Kenya.

The proposal, which also exempts users already covered under existing administrative fee waivers, aims to make Kenyan exports more competitive and profitable, particularly for sectors like fresh produce, flowers, and avocados, in line with advocacy from the Shippers Council of Eastern Africa (SCEA) to address non-tariff barriers.

“It is our view that this proposal will address the concerns raised by stakeholders, particularly the Fresh Produce Association of Kenya (FPEAK), the Kenya Flower Council, and the Association of Avocado Exporters of Kenya, on the impact of the $10 UCR fees on their competitiveness and profitability and will positively impact the industry’s performance,” he said.

This, according to him, is also in line with the broader government policy on the promotion of exports.

The importation of key input materials that are used in the manufacture of the different products that the country deals with has been cited to be a significant challenge by businesses, with the majority of them citing high taxation.

KIFWA expressed its support for KenTrade’s proposal to slash the $10 UCR fee by the proposed 50 per cent per IDF while emphasising the potential impact of the fee reduction on Kenya’s exporters.

National chairman Fredrick Oloo said the proposal will ease the financial burden on our members and make Kenyan goods more competitive, especially in the global market for perishables like avocados and flowers. He noted that the reduction aligns with the ongoing advocacy for streamlined cargo clearance and cost reduction, which most businesses have been struggling with.

Oloo also urged Parliament to expedite the legislative process for the proposal, echoing his earlier calls for the swift passage of the Kenya Customs and Freight Forwarding Management Bill, which aims to further professionalise the industry.

He reaffirmed KIFWA’s commitment to working with KenTrade and the Kenya Revenue Authority (KRA) to ensure the TFP’s advancements, such as faster permit processing and maritime integration, benefit all members.

Shippers through the CEO of the Shippers Council of Eastern Africa, Agayo Ogambi, confirmed the burden that the majority of them and other businesses have been facing, noting that “This is what we have been pushing for from day one and we are happy that finally our cry is being heeded.”