Taxation for Companies & Partnerships

Importing and Exporting, at a glance

What is Exportation?

 To Export means to take or cause to be taken out of the Partner State.

In accordance with the provisions of Sec.73 of the EACCMA 2004, goods for Exportation shall be entered (declared) in the prescribed manner and the owner furnish customs with the full particulars, supported by documentary evidence, of the goods referred to in the entry. The goods declared shall be exported within thirty days from the date of entry.

 

What is required when Exporting?

Clearing Agent

The Exporter will need to acquire the services of a licensed customs clearing agent. A clearing agent is mandated to process the Exportation documents in the customs system and assist in clearing goods on your behalf.

 

Export Levy:

Some select items attract an export Levy as outlined the First Schedule of the miscellaneous Fees and Levies Act of 2016.

 

What are the documents required in clearance of Exported goods?

To clear any Exported goods requires the engagement of a licensed customs clearing agent. When engaging with your preferred clearing agent ensure you always provide Exportation documents including but not limited to:

  • A valid Commercial Invoice;
  • Certificate of origin
  • Permit/License for restricted goods
  • Personal or Taxpayer Identification Number (PIN certificate)
  • Purchase Orders/Contracts
  • Packing List

The customs clearing agent is then allowed to declare the goods you are Exporting in the customs system (Create an entry).

 

Goods Clearance Process

  1. Entry Declaration and Processing

    The appointed clearing agent should make a customs declaration (entry), in accordance to the provisions of Section 73 of the East Africa Community Customs Management Act 2004. Customs Shall Process all compliant declaration.

  2. Stuffing, Verification and Release

    The agent should present the original entry and supporting documents to the customs discharge/loading station for processing (witness of Stuffing/verification may be done at the station or any other approved stuffing area).

  3. Exit

    Upon stuffing/Verification, all compliant declarations are cleared and released. Upon exit through the border, or port, a certificate of export is issued.

 

What is importation?

To Import means to bring or cause to be brought into the Partner States from a foreign country;

What to know when importing

In accordance with the provisions of Sec.34 of the EACCMA 2004, goods for importation shall be entered (declared) within twenty-one days after the commencement of discharge or in the case of vehicles, on arrival.

The importer or Clearing agent shall capture all the mandatory details required when declaring an import in the customs System.

What is required when importing?

Clearing Agent

The Importer will need to acquire the services of a licensed customs clearing agent. A clearing agent is mandated to process the importation documents in the customs system and assist in clearing goods on your behalf.

Duties and Taxes Payable:

Taxes are payable depending on the value of the imported item(s) and the duty rate applicable outlined under different legal documents as given below.

  1. Import Duties

    Depending with the item to be imported, the Import tax rates vary between 0%, 10% and 25% as provided by the East Africa Community Common External Tariff (CET). However, Sensitive items Attract duty higher than 25%. The sensitive items are listed in the schedule 2 of the EAC Common External tariff.

  2. Excise Duties

    Excise Duty depends on whether the imported item is excisable or not. The Excise duty rates are prescribed under the Excise Duty Act 2015.

  3. Value Added Tax (VAT)

    The normal rate of VAT is 16%. However, the Items exempted from VAT as provided by the VAT Act of 2013 attract a rate of 0%.

  4. Import Declaration Fees (IDF) & Railway Development Levy (RDL)

    An import declaration fees of 2% and Railway development Levy of 1.5% are levied on value of imports as provided by the miscellaneous Fees and Levies Act of 2016.

 

What are the documents required in clearance of imported goods?

To clear any imported goods such as a car, machinery or general merchandise requires the engagement of a licensed customs clearing agent. When engaging with your preferred clearing agent ensure you always provide importation documents including but not limited to:

  • A Certificate of Conformity (CoC) from the PVoC agent for regulated products;
  • an import standards mark (ISM) when applicable;
  • Valid Commercial Invoice from the exporting firm
  • valid pro forma invoices from the exporting firm.
  • Bill of Lading (sea cargo)/Airway Bill (air cargo)
  • Certificate of origin
  • Freight invoice for sea cargo
  • Logbook and its translation if it is not in English (motor vehicle)
  • Permit/License for restricted goods
  • Personal or Taxpayer Identification Number (PIN certificate)
  • Exemption letter (in case goods are exempted)
  • Purchase Orders/Contracts
  • Certificate of Roadworthiness for Motor Vehicles
  • Packing List
  • Letter of Credit (if available)

The customs clearing agent is then allowed to declare the goods you are importing inn the customs system (Create an entry).

Goods Clearance Process

  1. IDF Lodgement & Processing

    The importer on obtaining the pro-forma invoice shall engage a licensed clearing agent to lodge an import declaration form. The importer should then send the IDF to the Supplier for Pre-shipment inspection.

  2. Entry Declaration, Payment of Taxes and Processing

    The appointed clearing agent should make a customs declaration and provide the importer with a payment slip. The importer makes the payment to the bank and issues the agent with the official bank slips. Customs Shall Process all compliant declarations.

  3. Verification and Other Enforcement Measures

    The agent should present the physical file at the customs station where the goods are domiciled where physical verification is conducted.

  4. Clearance and Release

    Upon verification, all compliant declarations are cleared and released.

 

 

Motor Cycle Import Duty

How much would it cost to import a bike when you include import duty, excise tax and custom clearance fees? 

 

Motor Vehicle Import Duty

How much would it cost to import a vehicle when you include import duty, excise tax and customs clearance fees?