Last week, Kenya Trade Agency (Kentrade) introduced the Kenya TradeNet System fees compiling importers to pay Sh5,000 ($50) annual fee besides value added tax (VAT). The user must also part with Sh750 ($7.5) for a unique consignment reference number plus VAT and an arrival notification fee per vessel of Sh7,500 ($75), plus VAT.
The system, which serves as a national electronic single window for lodging international trade documents, has been free since 2012 when it was first launched.
However, no sooner had the new fees been introduced than local industrialists led by Kenya Association of Manufacturers (KAM) strongly opposed it saying it would hurt the government's effort to boost employment and exports via the manufacturing sector.
“Introducing charges on importers using the platform only serves to increase input costs that will be passed on to consumers via price increments,” said Phyllis Wakiaga, CEO Kenya Association of Manufacturers.
“These charges only serve to make goods uncompetitive in a regional market shared with competitors in Uganda and Tanzania whose governments do not charge for use of single window systems.”
In a memorandum to the Trade ministry, KAM termed the user fees as “unnecessary”
“Most manufacturers importing raw materials absorb numerous charges that make them start production with an unnecessary 13 percent cost disadvantage compared to our neighbouring countries within the EAC,” said Ms Wakiaga.
On Tuesday, following the backlash from importers the State withdrew the user charges.
In a two paragraph statement, Kentrade said it had decided to remove the charges which came into effect on February 1 “following consultations.”
“We notify all our stakeholders that following consultations, the recently introduced user fees on the national electronic single window (Kentrade TradeNet System) services have been withdrawn,” said the notice.