Pricewaterhouse Coopers (PwC) has acknowledged the move by the Commissioner of Customs and Border Control to lift restrictions on warehousing of goods in Customs bonded warehouses imposed by Customs in May last year.
The decision has been received as a welcome relief for businesses that utilize customs bonded warehouses to store goods, defer payment of duties and are involved in regional trade. The decision was relayed to the public through Gazette Notice no. 3738 dated 15th April, 2021.
Commenting on the decision, Maurice Mwaniki, Indirect Taxes Associate Director at PwC Kenya noted, “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. Additionally, we expect 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.”
Upon implementation of the initial decision in May last year, many businesses were forced to r-evaluate their services in the region. As a result, it is likely this cost Kenya business opportunities.
Tax policymakers have been advised to ensure tax laws are not changed frequently, as the lack of consistency results into significant adverse impact to businesses.
Moreover, warehousing is not exclusive to 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.