This archive report was first published on 10 May 2021.
On 15 April 2021, the Kenyan government lifted restrictions on warehousing of goods in Customs bonded warehouses, a move that has been welcomed by businesses involved in regional trade.
This decision was communicated through Gazette Notice no. 3738, and it is a significant relief for businesses that utilize customs bonded warehouses to store goods, defer payment of duties, and are involved in regional trade.
According to Maurice Mwaniki, Indirect Taxes Associate Director at PwC Kenya, 'We expect that with Customs having lifted restrictions on warehousing of goods will help contribute to the Government's agenda of reviving the economy in light of the ravages of the Covid-19 pandemic, improve cash flow and stock management for businesses.'
Furthermore, Mwaniki added, 'This will once again enhance the competitiveness of Kenya as a global and regional logistics hub; and will assist attract inward investment into Kenya and the wider East African region.'
Whilst the decision to lift the restriction is positive, it is essential to note that the initial decision made in May 2020 to stop warehousing of goods in bonded caught many investors by surprise, forcing them to re-evaluate whether they would continue serving their customers across the region from Kenya.
Businesses world over rely on bonded warehousing to manage cashflow and secure global supply chains. By allowing businesses to warehouse goods without payment of duties makes countries competitive and more attractive to investors who are looking at Kenya as their preferred base for regional trade.
