NAIROBI: The Kenya Revenue Authority (KRA) has introduced a simplified tax regime aimed at boosting trade facilitation and compliance among Micro, Small, and Medium Enterprises (MSMEs). The initiative was announced during an engagement session with media practitioners, where KRA officials highlighted measures to support legitimate trade, enhance security, and streamline business operations for smaller enterprises.
According to Kenya News Agency, Joakim Mwawasi from the KRA Customs and Border Control Department outlined several roles that customs play, including facilitating legitimate trade, enforcing legal prohibitions, collecting revenue, and gathering trade statistics. Mwawasi explained that MSMEs typically operate in limited cross-border trade, utilizing loose container loads and various transport modes for goods valued at USD 2000 or below per transaction.
Mwawasi emphasized the existing and forthcoming trade facilitation initiatives for MSMEs, such as a simplified trade regime and goods clearance unde
r a consolidated framework. Upcoming projects include self-clear solutions for consolidated cargo, automated clearance processes, and the creation of de-consolidated centers. These measures aim to expand market access, boost productivity, lower business costs, and enhance global competitiveness for traders.
KRA’s initiatives also include the Authorised Economic Operator Programme, which simplifies customs procedures and reduces clearance times, and the Pre-Arrival Processing system, which expedites the release of goods. Other efforts involve an integrated Customs Management System for processing declarations, a Regional Electronic Cargo Tracking System for real-time tracking, and the installation of cargo scanners to reduce clearance times.
Mwawasi highlighted the benefits of these initiatives, such as improved border efficiency, reduced clearance time, and enhanced cargo security. The establishment of One Stop Border Posts has further enhanced customs revenue growth and business competitiveness.
The simpl
ified import process for MSMEs requires documentation like a simplified certificate of origin and a commercial invoice, processed through an automated system. KRA Domestic Taxes Department Manager Wanja Wangondu elaborated on the tax compliance framework for SMEs, which includes a Turnover Tax rate of 1.5 percent and a Monthly Rental Income tax of 7.5 percent.
Wangondu mentioned digital filing platforms and alternative dispute resolution mechanisms to aid compliance. She also noted capacity-building programs and a voluntary disclosure initiative that waived penalties, which concluded in June 2023. KRA reported an 11.1 percent growth in revenue collection, reaching Sh2.4 trillion in the 2023/2024 financial year.
