The AfCFTA has created a number of opportunities. These are some of the opportunities:

• The AfCFTA seeks to combine the economies of 55 African states under a pan-African free trade area comprising 1.3 billion people in a market with a combined GDP of about $2.5 trillion to $6.4 Trillion.
• Africa is the world Second largest and second most populous continent and by 2050 Africa's population is projected to reach 2 billion. About 70% of Africans are under 30 years of age and over half are females.
• According to United Nations Economic Commission for Africa (UNECA) Report, it is envisaged that the AfCFTA will double intra-African trade from 12% (2012) to 25%.
• Africa has approximately 30% of the earth’s remaining mineral resources. The Continent has the largest reserves of precious metals with over 40% of the gold reserves, over 60% of cobalt, and 90% of platinum reserves.
• Africa is the world’s poorest and most underdeveloped continent with a continental GDP that accounts for just 2.4% of global GDP and accounts for only 4% of global Trade. In addition, Africa accounts for around 60% of the world’s uncultivated arable land.
• According to UNCTAD Report the AfCFTA will result in Total welfare gains of US$ 16 Billion – 24 Billion (+0.97% GDP and +1.17% employment)

Below is a diagrammatic representation of structure and scope of the agreement.

REF:

• F.N: Most favored Nation Treatment (MFN a WTO defining/ founding principle/ trade policy that requires member country to extend the same trade terms to all trading partners/nations
• M.A.A: Mutual Administrative Arrangements/ Agreement

KRA has implemented AfCFTA through the following:

The Ministry of Trade & Industry in collaboration with other Government Agencies leads implementation of AfCFTA in Kenya. Kenya has exported its first consignment under the AfCFTA agreement to Ghana on 5th October 2022 through guided initiative established by AfCFTA Secretariat. This is after the Gazettement of EAC Provisional Schedules of Tariff Concessions  of Category A products in September 2022.

Kenya Revenue Authority through the Customs & Border Control Department, C&BC.  is in charge of issuance of preferential proofs of origin including the AfCFTA certificates of origin, by implementing following measures:

• Procured 15,000 AfCFTA certificates of origin. The first consignment under the AfCFTA framework was exported to Ghana on 5th October 2022. Other exporters who been exporting goods outside the AfCFTA framework have applied to export goods under the AfCFTA agreement and are being facilitated.
• Drafted and submitted for gazettement the EAC Schedule of Tariff Concessions for the AfCFTA for Category A products (90% of the tariff lines). The tariff concessions were gazetted on 6th September 2022.
• Sensitized customs officers stationed at border stations (Malaba, Busia, Isebania, Namanga, Loitoktok, Taveta, Lungalunga and Moyale) on their role of signing and issuing AfCFTA certificates of origin.
• Four (4) Rules of Origin, ROO desks have been set up in Loitoktok, Taveta, Lungalunga and Moyale. Customs officers operating the ROO desks will facilitate stakeholders with information on AfCFTA provisions among other concerns.

The following are the procedures for registration as an AfCFTA exporter 

Customs & Border Control department is currently receiving applications from companies wishing to export goods under AfCFTA. The applicants are registered at any of the Rules of Origin offices located in Nairobi, Mombasa, Nakuru, Eldoret and Kisumu, upon completion of registration form that can be downloaded from the KRA website or issued by the Rules of Origin Office.  Attachments to the registration application include;

• Copy of the business registration certificate
• Copy of the KRA PIN certificate,
• Copy of the particular business license where this is applicable (e.g. a valid HCD for horticultural products, Mining Licence for mineral products).

Exporters are verified to ascertain originating status of the goods intended for export as stipulated under Annex 2 to the Protocol on Trade in Goods. Qualifying exporters are allocated Reference numbers and can then purchase AfCFTA certificate of origin at USD 3 per certificate.

An exporter seeking to export goods under the AfCFTA framework is required to fill and submit in triplicate an AfCFTA certificate of origin attached with export invoice, customs entry and other supporting documents.

KRA has come up with initiatives to support the implementation of AfCFTA. The following are some of the initiatives:

• Names of contact persons for Rules of Origin as well as Authorized signatories to the AfCFTA Certificates of Origin were submitted to the AfCFTA Secretariat.
• Sensitization programme for the business community and KRA staff is ongoing.
• Establishment of Rules of Origin desk at OSBP’s to sensitize and create awareness on AfCFTA provisions as well as handle origin matters.
• C&BC Business Transformation Office (BTO) is in the process of updating the Customs systems and procedures to accommodate AfCFTA.

Customs & Border Control Department

Trade Facilitation Division

Times Tower Building, 12^th floor

OR:

The Rule of Origin Office

First Floor Block B1 

Sameer Business Park, Nairobi, Mombasa Road

Email: rulesoforigin@kra.go.ke

Telephone: 0709013334/ 070901660

Single Customs Territory is the full attainment of the Customs Union achievable through minimization of internal border controls and removal of trade restrictions between Partner States ultimately resulting in free circulation of goods in the Customs Territory.

Free Circulation of Goods

Goods originating from one Partner State to another within the Customs Union are not subjected to Customs Tariff as long as they meet the EAC Rules of Origin Criteria. Goods imported from outside the Customs Union, which have been entered and released for home consumption, are free to circulate within the Community. Each category requires unique modalities depending on the customs regime under which they are declared.

Currently, Burundi, Kenya, Rwanda, Tanzania, Uganda are involved.

1. Goods are entered while at the first point of entry
2. Single Customs declaration is made and taxes paid at the destination country when goods are still at the first point of entry
3. Goods are moved under a single Regional bond from the port to destination
4. Goods are monitored by electronic cargo tracking system
5. Interconnected Customs systems

1. Reduced clearance time
2. Reduced cost of doing business due to reduced administrative costs and regulatory requirements
3. Reduced risks associated with non-compliance during transit of goods hence minimized smuggling at a regional level
4. Enhanced trade in locally produced goods
5. Efficient revenue management

1. Importers and exporters
2. Clearing & Forwarding agents
3. Transporters
4. Bonded warehouse owners
5. Container Freight Stations (CFSs)
6. Ports Authorities
7. Shipping Line Agents
8. Insurance Companies

* Imports into the EAC Region - Common External Tariff applies to all goods imported into the EAC region. The goods may be for direct home use, warehousing or transit through a Partner State.

 Imports Procedure

1. Manifests are submitted to Kenya Revenue Authority (KRA) and Tanzania Revenue Authority (TRA) by shipper prior to Vessel arrival
2. KRA /TRA transmits manifests to the respective Revenue Authorities;
3. Importer/Agent access manifest data through the respective Revenue Authority Customs Systems and lodges a Customs declaration/Entry.
4. Taxes are paid at destination Partner State for duty paid cargo using respective national currency.
5. Physical verification of selected consignments may be carried out at a designated area as may be determined by the respective Revenue Authority
6. Release is issued from destination Revenue Authorities
7. Removal of goods from first point of entry. 

Exports Procedure

1. Customs Agents Capture Export declaration in the Customs Systems of the Partner State where the goods are originating
2. Export declaration is secured by a regional Bond (RCTG)
3. Processing and release of the Export declaration/entry is done in the originating Partner State to allow release of goods
4. Upon receipt of Port release message, the transit Bond is acquitted by the originating Partner state.

Bond guarantee is required for goods declared for warehousing, temporary importation, transit and on duty remission/ exemption. A bond guarantee is not required for goods where taxes have been paid at destination.

Through the EAC mutual recognition agreement, a clearing agent licensed in any Partner State may clear Single Customs Territory goods destined to or originating from their respective country to or from any Partner State.

The RECTS seal is free of charge.

You can reach the SCT Liaison Office via email sct@kra.go.ke or 0709012081/3072/3078        

A tax refund is a reimbursement of excess tax paid or tax paid in error in a given period.

• Tax refunds resulting from zero rating of exportation of goods allow exporters to be more competitive in the foreign market and allow them to plough it back into the business.
• Ensure affordability of certain goods and services deemed as essentials e.g. zero rating of bread, milk, flour.
• To ensure equity where tax is deducted in error

Income Tax Refunds

This refund will arise from tax overpayments by both individual and corporate taxpayers.

The following circumstances may lead to an income tax refund:

• Over deduction of tax(PAYE) by the employer
• Tax incentives on mortgage interest relief, insurance premium relief, and annual tax relief
• Exemption on account of disability.
• Overpayment of Instalment Taxes 
• Withholding Tax
• Advance Tax credits

NB: A claim for an Income Tax refund must be made within five (5) years from the date the tax was paid.

VAT Refunds

VAT refunds occur as a result of overpayment of taxes as a result of:

• Excess credits as a result of zero-rated supplies
• Excess credits arising out of withholding VAT
• Bad debts- after a period of three years but not more than 4 years from the date of that supply (where a registered person has made a supply and has accounted for and paid tax on that supply and has not received any payment from the person liable to pay the tax)

Excise Tax Refunds

Occurs when a person dealing with excisable goods manufactured in or imported into Kenya has paid excise duty.

The Commissioner shall, on application by the person, refund the excise duty paid if satisfied that

• Before being consumed or used in Kenya
• The goods have been damaged or stolen during the voyage or transportation to Kenya
• The buyer has returned the goods in accordance with the contract of sale.
• The excise duty paid in respect of spirits or illuminating kerosene that have subsequently been used by a licensed or registered manufacturer to manufacture un-excisable goods.