The Kenya Revenue Authority (KRA) has moved to quell a growing rebellion among freight forwarders and motor vehicle dealers over sweeping new import documentation rules, insisting that the new measures are mandated by parliament and not subject to negotiation.

In a statement dated September 7th, the taxman explained that the requirement for an export declaration on all imported goods is anchored in Section 23B of the Tax Procedures Act, which came into effect on September 1st.

This legal provision obliges importers to obtain and retain a valid customs export certificate from the country of origin for a minimum of five years.

The move has sent shockwaves among clearing agents, who warn the new paperwork demand threatens to rock operations at the Port of Mombasa and drive up compliance costs for businesses. 

Additionally, the players decried that this requirement could negatively affect business associated with goods that are trans-shipped through third countries where origin documentation is notoriously difficult to secure.

"The requirements for an export declaration in the clearance of imported goods are anchored by law," KRA stated, noting that it was merely implementing legislation enacted by Parliament. 

KRA has offered to engage the affected stakeholders to help "minimise unnecessary disruption" to their operations.

However, the authority was less forthcoming on a separate dispute regarding the valuation of imported motor vehicles, another contentious issue that has pitted dealers against the taxman for months.

With legal proceedings already underway, KRA invoked the sub judice principle, declining to comment on the "specific merits of the valuation methodology" while it awaits the court's direction. 

The valuation methodology, which determines the taxable value of second-hand imports, has been a persistent source of friction, with dealers arguing it artificially inflates tax liabilities.

The disputes come against a backdrop of heightened tensions between KRA and the trading community. The authority was forced to issue a separate clarification last month after small-scale traders threatened a nationwide shutdown over a revised minimum benchmark for consolidated cargo. 

KRA subsequently stressed that the KSh3.2 million figure, the subject of intense protest, represented a risk-management "minimum yield" rather than a fixed tax bill.

The new documentation rules, which analysts view as KRA's most aggressive compliance tool in years, are designed to curb chronic undervaluation. The authority is believed to have identified significant discrepancies between import records in Kenya and export records in major source markets such as China.

Nevertheless, the implementation of Section 23B has been anything but smooth. For importers facing the reality of the September 1 deadline, the requirement to hold customs documentation for five years represents a significant shift in record-keeping obligations, with many now scrambling to digitise archives to avoid potential retrospective penalties.

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