Page 8 - AfrElec Week 13

AfrElec COMMENTARY AfrElec
that the Kenya Revenue Authority (KRA) had halted more than 200 fuel tanker trucks in KPC’s Eldoret and Kisumu terminals. In let- ters delivered to the trucks’ owners, KRA said it would not allow the fuel shipments to continue to their intended destinations in Uganda, South Sudan, Rwanda, the Democratic Republic of Congo and Burundi unless it received overdue tax payments.
The Kenyan government agency has accused the companies involved of failing to pay a total of KES757.6mn ($7.2mn) in taxes since 2015 for petroleum products that they allegedly sold on local markets rather than shipping it across the border. The fuel companies have denied these charges, saying that they exported their cargoes as reported. But KRA has reportedly demanded that the firms provide documented proof that they paid customs duties on the full amounts in other countries.
According to the East African, the freeze did not remain in place for long, as Kenyan officials did eventually let some trucks leave. But it could very well happen again. Kevin Safari, KRA’s com- missioner for customs and border control, told
the East African on March 21 that his agency was determined to collect all of the money it believed it was owed. “Where taxes remain outstanding, we will recover [funds] from the guarantors to the transit security bonds – that is, [from] insur- ance companies and banks,” he said.
This threat appears to have teeth. The East African reported that it had seen documents in which KRA had instructed a number of banks to liquidate fuel companies’ security bonds in order to facilitate payment of the tax revenues demanded. This policy could lead to substan- tial disruptions in cross-border trade, as these bonds ensure that fuel traders also have cash in the bank to cover their transit and customs costs.
Such disruptions, in turn, would only com- pound the problems that have arisen because of the coronavirus pandemic. They might not lead to immediate shortages, given that Ugan- da’s government has added restrictions on travel by public transit and private automobiles to its public health regime. But since fuel stocks are reportedly shrinking, Ugandan fuel traders and distributors might do well to start examining their options for transit through Tanzania. ™
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w w w . N E W S B A S E . c o m Week 13 02•April•2020