This archive report was first published on 17 December 2019.
Clearance Delays for Used Cars Cause Financial Burden ¶
Importers of secondhand vehicles have been facing significant financial burdens due to clearance delays caused by the National Transport and Safety Authority (NTSA).
The Kenya Revenue Authority (KRA) transfers vehicle data to NTSA after importers have cleared their cars and paid all required duties. However, this process has been taking too long, resulting in hefty storage charges for importers.
According to the Car Importers Association of Kenya (CIAK), Kenya Auto Bazaar Association (KABA), and the Kenya International Freight and Warehousing Association (Kifwa), NTSA should fast-track the relay of data, as delays have led to significant storage charges.
NTSA has denied experiencing any delays in their system, stating that all applications are processed in time. However, importers claim that the process takes between one and two weeks, forcing them to pay storage and demurrage charges.
Every year, the Port of Mombasa receives about 130,000 units of second-hand vehicles. Importers say they have to pay storage charges amounting to Sh6,000 daily due to delay in clearance of a vehicle.
"Mapping of data from KRA to NTSA should not take more than two days," said Peter Otieno, CIAK chairman. "The inefficiencies at NTSA are costly to traders," he added.
"When you clear your vehicle and pay all the duties, an entry is created by KRA. If you go to NTSA and that entry is not found, it delays the clearance of the vehicle," said Mr. Otieno.
"Immediately you release cars with KRA, the data is expected to map automatically to NTSA so that importers or clearing agents can go for number plates processing and get their cars. That is not happening and the process takes between one and two weeks, forcing importers to pay storage and demurrage charges," said Roy Mwanthi, Kifwa chairman.
"Data should migrate from KRA to NTSA, then the data officers at NTSA need to immediately approve and allocate the number. We need a full working system from NTSA to alleviate the suffering of importers," said Mr. Mwanthi.
"A lot of money is paid as demurrage because some cars stay for as long as 14 days and this is discouraging many people in the car business. This is a colossal amount of money. We need effective systems," said Mr. Mwanthi.
