The Integrated Customs Management System (iCMS) that is set for June 30th fully rollout has reduced paperwork cargo clearance period from 24hours to under 10minutes, according to users.
This has been one of the positive things brought about by COVID-19, which made the Kenya Revenue Authority (KRA) and other agencies to fast-track automation of customs clearance process because of pandemic transmission measures that discouraged physical interactions.
The system also allows clearance of goods before the vessel arrives, enabling importers and clearing agents to deliver cargo immediately they are discharged and made available at the points of entry.
Overall, vessel documentation has improved from 48hours to 24 hours, according to Silvester Kututa, the Chairman and Founder of Express Shipping Line (ESL)- one of the firms that has been piloting bulk cargo sea release module. Kututa is also the Chairman of the Kenya Ships Agents Association.
ESL has piloted the system since August 2019 when a bulk cargo module was launched owing to the volume of bulk cargo it handles at the port of Mombasa and in house IT infrastructure it had put in place, according to Kututa.
“So far, we have lodged about 112 manifests (vessels) through KRA iCMS portal successfully,” Kututa said.
The new KRA system replaces the over a decade old Simba system, which has some serious shortcomings because of a rapidly changing technology and dynamics.
Having successfully rolled out air cargo clearance modules through iCMS, KRA fully rolled out clearance of motor vehicles and bulk cargo at the port of Mombasa in November last year after several months of piloting.
In early this year, KRA included containerised cargo, which is also being piloted at the port. The need to enhance efficiency in cargo clearance processes prompted KRA to develop an integrated system with friendly interactive capabilities to eliminate redundancy and automate both the manual and semi-annual processes, according to KRA officials.
The system has also addressed the performance challenges and filled the security gaps being experienced by the old system, she added.
iCMS was first rolled out in March 2019 at Jomo Kenyatta International Airport (JKIA) and has since been fully rolled at Moi and Eldoret international airports, where it is being used to clear both the import and export cargo.
Other benefits of the system, according to Kututa, include coordination between agents and stakeholders reducing human interaction that saves time, and enhances integrity levels in the cargo clearance customs system.
Kenya’s TradeNet System, operated by KenTrade, the online cargo clearance platform, is now fully integrated to the KRA new system and has now registered over 12,500 system users and 35 Partner Government Agencies (PGA).
So far, about 21 government agencies have been integrated into the KRA system, Kututa said, adding that the overall effect will be realized upon full integration.
“Operations cost brought about by movement from office to office has also been reduced significantly, and instant funds sighting from banks to KRA has brought about transparency in tax collection and brought about timely entry approval,” Kututa said.
KRA has in the recent months attributed high custom revenue collection on improved transparency. The Taxman has recorded the highest revenue performance rate since the beginning of the Financial Year 2020/2021 after collecting Kshs 144.6 billion in March 2021 surpassing the revenue target.
This was an outstanding performance compared to the month of February 20xx when KRA collected Kshs 127.7 billion, registering a performance rate of 105.1% to surpass its February revenue collection target.
In the fourth month running, Customs & Border Control (C&BC) Department continued to record excellent performance after achieving a growth of 47.3% with a revenue collection of Kshs 60.751 billion, the second highest monthly collection in its history.
The new system, according to Kututa has enabled visibility of process flow for the importers & exporters as one can track and see the choke points.
“It has also been helpful regarding one time approval for exemptions on Import Declaration Forms (IDF) and Railway Development Levy (RDF) fees for members of Kenya Manufacturers Association (KAM), which required physical approval based per shipment hence saving time and making the process seamless and speedier than before,” Kututa said.
Approval of the IDF took up to two days and will now take less than 30 seconds. Approval of declaration upon payment of taxes will also drop from the current 2 days to less than 30 seconds.
Approval of manifest upon submission will take less than 30 seconds as opposed to the current 2 days while it will take less than 30 seconds to release Authorized Economic Operators (AEO) consignment which currently takes up to 6 hours, KRA said in an earlier statement.
However, there are teething challenges as iCMS rolls out for container shipments. Most of the container shipping lines and agents cannot process the customs manifest immediately the vessels sail from the port of loadings. This is because there are changes that are made at the transshipment ports and KPA accepts only amends done at the last transshipment port that have usually very short transit time.
Industry insiders have revealed that most of the importers have not taken this program into serious consideration due to cash flow management as they only want to pay the government taxes and levies when the cargo is available and ready for clearance.
Once fully operational, the challenge will remain at the port container terminal, where a new operating system has not yet been implemented according to Kututa.
