East Africa: Comesa sugar held by tax authorities at Mombasa port

Sugar imported under Comesa is being held up at the port of Mombasa after the Kenya Revenue Authority (KRA) demanded full payment of taxes before the goods are released.

The move has left importers in a bind as it comes before the Comesa import deadline of February 2021 expires.

Importers said they had been cleared by all relevant departments, and the Agriculture and Food Authority (AFA) confirmed they were meeting the quota.

“Before importing sugar, we met all the requirements, including obtaining sugar from qualified Comesa member states or EAC member states. We even produced a letter issued by the factory producing the sugar to confirm that the sugar under investigation was produced by itself, ”said one of the importers.

He added: “All shipments were accompanied by valid Comesa Certificates of Origin.”

Rules of origin are needed to bring imports closer to the allocated quota and to ensure that it is not overdrawn.

Full payment of fees and charges

According to documents seen by The EastAfrican, KRA is demanding full payment of duties and fees from a number of importers who had previously imported the sugar under the framework.

“You are required to pay all taxes because the Comesa quota is exhausted, and please request approval of Comesa tariffs,” said a communication sent by KRA.

The business world is now wondering about the demand given that any import of sugar within the framework of Comesa is authorized by the AFA after reconciling the imports with the allocated quota and ensuring that it is not uncovered. .

According to a circular dated December 24, 2020, Customs and Border Control Commissioner Pamela Ahago informed deputy commissioners and KRA staff that they should tell accredited importers to take advantage of the Comesa window to import more sugar.

Ms Ahago said that a review of the 41st Comesa Council report adopted on November 26, 2020 showed that quota safeguards covered the period from March 1, 2020 to February 28, 2021 and indicated that only 192,527 tonnes of the allocated quota of 250,000 tonnes of sugar imports from March 2020 to October 2020 had been made.

The KRA also banned 10 companies with a total volume of 10,000 tonnes at various container freight stations in Mombasa from importing more sugar under Comesa.

The companies are Big Two Commodities, Commodix, Fixate Commodities, Niate Commodities, Ifox Commodities, Pacematt Commodities, Option Two Ltd, Niang Commodities Ltd, Pillarmat Ltd and Pricematt.

In November last year, the Comesa Council of Ministers granted Kenya a two-year sugar safeguard extension, from March 2021 to February 2023. At its 41st meeting held virtually on November 26, 2020, the Council urged Kenya to share the modalities used in calculating the projected sugar deficit with other member states by November 30, 2020.

Kenya had made a presentation on the progress of sugar safeguard implementation through Comesa’s technical committees and requested a two-year extension after the current one expires in February 2021.

In its decision, the Council urged Kenya to prioritize sugar originating in Comesa, noting that the region is producing enough to fill the deficit. The country will benefit from a certain flexibility with regard to the implementation of sugar safeguard quotas allocated when importing from Comesa member states.

Kenya informed the meeting that all of its factories are currently in production and therefore expects an increase in sugar available for domestic consumption.

Other conditions given in Kenya were to provide a detailed roadmap on how to improve the competitiveness of the sugar sector during the extended safeguard period, ensure that the import permit issuance process is transparent, fast and efficient ; and provide the projected deficit in January of each year based on ISO production and consumption data.

The council urged Kenya to disaggregate the World Customs Organization Harmonized System (HS codes) for refined white sugar and white / brown ground sugar. The safeguard should only apply to the milling of white / brown sugar.

The council ordered that any inevitable full or partial suspension of Comesa quotas or the East African Community import tariff for sugar, or interruption of the preferential access established under that agreement, be preceded by prior consultation with the parties concerned. This should be done through the Kenya Safeguarding Sub-Committee and includes a reasonable notice period of at least three months.

Esther L. Steinbach

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