By PATRICK BEJA
New external tariff on imported rice has generated the heat at the Mombasa port.
Sources at the port said that the tariff has dealt a major blow to traders who manipulated invoices in the past tax regime and paid less duty.
They said the new rules, which placed the import duty on the commodity at 35 per cent on the Cost of Insurance and Freight (CIF) or $200 (about Sh17,000) per metric tonne, whichever is higher could have reduced chances to manipulate the value.
The new duty translate to about Sh16.8 per kilo which the affected traders view as higher compared to the past.
The new rates were effected on July 1, following an East African Community protocol on Customs Union signed by Minister Musa Sirma on June 30. Sirma signed for the new taxation rates as chairperson of the EAC Council of ministers.
In the protocol, Kenya extended remission of 10 per cent duty on wheat grain for one year. Affected traders are reported to be uncomfortable as there is little room to cheat and are regrouping to challenge the taxation regime.
The Kenya Revenue Authority publicist in Mombasa Fatma Yusuf said issues of the external tariff should be addressed to the right offices.
“The traders should address the issue to the right place where the external tariff originated from,” she said.
The new taxation rates have reportedly affected traders who import thousands of tonnes of rice from Asian markets.
Traders says they now find it tough doing business at the port. In the previous tariff, grain importers would pay 35 per cent on the CIF based on value in the source markets.
Sources said traders could reduce the values of the invoice and collude with Customs officers to have the entries passed. This could reportedly see the traders pay little import duty and make a kill.