Lawmakers put the National Transport and Safety Authority (NTSA) under pressure to explain undocumented cash it collected from foreign cars operating in Kenya.
The money in question is Ksh65 million as revenue from issuance of foreign vehicle travel permit fees.
According to NTSA, it signed a deal with the taxman to collect the permit fees but were in the process of developing a joint system for information sharing.
Improper documentation has made it impossible for the government to confirm the total amount of money collected by the agencies in charge and its expenditure.
“Although the management explained that the fee is collected by the KRA, evidence of the measures in place to ensure all revenue due is collected and accounted for was not provided for audit,” the report reads.
Pursuant to the East African Community Customs Management Regulation (EACCMR) 2010, (Regulation 136 and 137) and the Traffic Act, Rule 7A (3), KRA works in tandem with NTSA for collection of permit fee for cars from outside Kenya.
Prior to gaining entry approval, the foreign operator from the East African Community (EAC) or Common Market for East and Southern Africa (COMESA) Countries must have a valid Temporary Importation of Road Vehicles Form (Form C32) which is issued at the Border Station.
NTSA told the Transport Committee that the taxman collects the money, adding that all the revenue was fully supported with schedules from the E-Citizen platform where it was collected.
Porous borders have seen Kenya lose millions of shillings in uncollected taxes mostly from Uganda and Tanzania. The law requires one to obtain temporary three-month import permits in a tax evasion scheme.
All motor vehicles imported on temporary basis for the use and convenience of the importer either from the neighbouring States must have a valid form, C44A, and a Foreign Motor Vehicle Permit both specifying the period of stay in the country. This category of motor vehicles must be re-exported within 12 months of the date of importation or before expiry of the period.
Most of the used cars coming from Uganda, though cheaper, are much older than those in the Kenyan market because Kampala has not put an age limit on imported second-hand automobiles.
Kenya’s cap on the age of second-hand car imports means the oldest units being allowed to Kenya were manufactured in 2014.
A Kenyan who has been working in Uganda for many years is allowed to bring home a car without paying taxes, provided it is registered in his or her name.
