Invited Guests,
Colleagues,
Ladies and Gentlemen,
It gives me great pleasure to join you today as we celebrate this year’s International Customs Day. International Customs Day is set aside to commemorate and appreciate Customs administrations globally. It is a day designated to honour the Custom officials and agencies for the significant role they play in ensuring that the global trade management is efficient, safe and secure.
Let me therefore take this opportunity to first appreciate the KRA Customs officers for the good job they are doing in our country. You have enabled KRA to efficiently facilitate legitimate trade without hindrances while protecting the country from threats posed by organized crime, smugglers, commercial fraudsters, terrorists, and even goods that could endanger the citizenry.
This has consequently contributed significantly to our success as a revenue collection agency. It is through your efforts that KRA surpassed its revenue target after revenue collection in the FY 2021-2022 reached a new record of KShs. 2.031 Trillion.
During this period, Customs and Border Control (C&BC) collected KShs. 728.530 Billion surpassing its target of KShs. 702.823 Billion. This represents a growth of 16.6% and a surplus collection of KShs. 25.707 Billion.
Customs and Border Control has continued with the good trend in the first half of the Financial Year 2022-2023. I am proud to announce that the department surpassed its half year target and collected KShs. 387.726 Billion against a target of KShs.381.643 Billion. We must therefore commend our officers for their dedication and brilliant work.
These remarkable results are attributed to implementation of world-class Customs infrastructure, professionalism and adoption of good policies. The good results can also be attributed to KRA’s efficient and business-friendly Customs services at the border posts.
Our Customs staff work tirelessly, around the clock to provide timely and reliable services as they also implement rigorous security actions at our borders countrywide.
Ladies and gentlemen
As you all know, the Government is currently scaling up revenue collection efforts by Kenya Revenue Authority (KRA) to KShs. 3.0 trillion in the FY 2023/24 and KShs. 4.0 trillion over the medium term. This is part of the country’s economic long term turnaround plan.
To achieve this, the Government will embark on tax administrative and tax policy reforms. As outlined in the 2023 draft budget statement policy, one of the strategies aimed at enhancing revenue collection is leveraging on technology and enhanced data analytics by Customs and Border Control.
Technology has proven to enhance effectiveness of Customs operations, which has consequently improved the national revenue. Currently, KRA has automated all its core Customs business processes through the iCMS platform, which has a great potential to transform the way in which we manage our Customs procedures.
The system has reduced cargo clearance and processing time, enhanced compliance, increased efficiency, and subsequently improved revenue collection. The system is a game changer in facilitating trade in the country and across the region. The system has helped reduce time taken to clear air cargo from an average of 6 days to 48 hours (2 days). This reflects a 66% improvement in clearance turnaround time which has also reduced losses by traders and drastically reduced customer complaints.
KRA has also supplemented the automated business platforms with other supportive automated solutions that promise to significantly increase the value we derive from automation.
These secondary platforms include:
- Cargo X-ray scanners and non-intrusive scanners
- Regional Electronic Cargo Tracking System(RECTS)
- Pre-arrival clearance
- Authorized economic operators (AEO’S)
- One-Stop Border Posts
- Single Customs Territory (SCT)
- Smart gates
The RECTS has played a key role to contain the diversion of transit goods including motor vehicles and other goods into the local market, unlike in the past when the vice was rampant and hurt the local industries through unfair competition. The system has also helped cut transit time by more than 75 percent in return boosting trade at the Mombasa port.
Further, the East Africa Community Single Customs Territory has minimised the transit goods clearance time. The system has reduced unnecessary trade barriers and tariffs, which has consequently ensured faster movement of cargo to the hinterland. For example, on the Northern Corridor, the turnaround time of goods transiting from Mombasa to Kampala has now reduced from 18 days to four, while goods from Mombasa to Kigali, from 21 days to six. The time and cost of transporting goods from the respective ports of Dar es Salaam and Mombasa has also reduced from 21 and 18 days to seven and four days, respectively.
As one of the SCT initiatives, the One-Stop Border Post (OSBP) has also facilitated the cross border trade between East African Community countries and made the region to be more attractive to investment. Most OSBPs have recorded a reduction in clearance and transit time and lowered cost of doing business. The average time taken to clear a truck at the OSBPs has reduced to between five and 10 minutes compared to the previous two to three days.
The Authorised Economic Operator (AEO) programme also expedites the movement, release and clearance of goods at ports and border stations by creating a partnership between Customs and businesses where mutual trust is established. Businesses under this program are scrutinised significantly less at the border compared to other regular cross border traders.
The programme reduce cargo clearance time and the costs associated with importing or exporting cargo, while guaranteeing safe, secure, and legitimate trade. KRA is committed to facilitating the expedited processing of AEO cargo for companies that maintain high levels of compliance as they engage in legitimate trade. Currently, approximately 30% of customs revenue is collected from AEO accredited importers. The Authority intends to grow this figure by enhancing trade facilitation for the existing AEOs while expanding the program to include compliant taxpayers in other categories, especially in warehousing and the Micro, Small and Medium-sized Enterprises (MSMEs).
KRA has also installed Smart Gates at oil depots. The system allows faster clearance, loading and exit of trucks from the depots. It is expected to eliminate long queues brought about by manual processes.
KRA has also adopted advanced risk management module in iCMS which include machine learning and Artificial Intelligence (AI) in the cargo clearance process. This has helped in examination of data captured by merchants to determine the risk level and the course of action. It reduces effort for manual/actual verification of the consignments which has in return enhanced and simplified the cargo clearance process for traders.
As I conclude, let me thank all the stakeholders for the support you have accorded KRA and specifically Customs officials. I would like to reiterate KRA’s commitment in employing technology to increase efficiency of Customs operations in the country. This will ensure that our borders are secure, our business environment is conducive and the society is protected.
It will also ensure that Kenya safeguards its social economic and development goal being the government’s revenue collection agency.
Thank you
FCPA, Githii Mburu, CBS, M.G.H
Commissioner General, Kenya Revenue Authority
