2. Customs Administration

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Effect of reforms in customs administration system on trade facilitation in Kenya
(KESRA/JKUAT - Unpublished research project, 01-10-18) Kibaki, Joel Muchiri
Customs administrations today face a variety of political and administrative pressures and challenges. These include fluctuating workloads with static or declining resources, greater business expectations, and continuing pressures to meet often-conflicting government revenue, trade facilitation, social protection, and national security objectives. To cope with these pressures and challenges, the international customs community looks to the applied use of information technology (IT) as a catalyst for improving organizational and operational efficiency and effectiveness. The general objective of this research was to establish the effect of reforms in custom administration system integrity, efficiency and governance on trade facilitation in Kenya. The specific objectives were to determine the effect of reforms in integrity of ICT infrastructure, improvements in efficiency of ICT service delivery and ICT governance reforms on trade facilitation in Kenya. This study was a descriptive cross-sectional survey. This study was carried out in Nairobi. The study involved 492 employees in the Customs Services Department of KRA at KRA headquarters in Times Towers, Nairobi. The sampling frame that was applied in this study was a list of employees in the Customs Services Department of KRA. This study employed stratified sampling technique to select the study participants. Questionnaire was utilized as data collection instrument in the current study. Analysis was through both descriptive and regression statistics. Presentation of results for both the descriptive and inferential statistics was through tables, pie-charts and graphs. Study results indicate that reforms in ICT integrity had significantly and positively affected trade facilitation (β = 0.540; t = 4.714; p < 0.05). Further, findings showed that reforms in efficiency of ICT service delivery positively and significantly influenced trade facilitation (β = 0.385; t = 2.550; p < 0.05). Additionally, study findings revealed that reforms in ICT governance at KRA had a significant and positive effect on trade facilitation (β = 0.174; t = 2.096; p < 0.05). From the study findings, the following recommendations are made. First, Customs initiatives, such as deferred payment of revenues, clearance on minimum information, periodic goods declarations, tariff-free policies and duty-free imports, and so on have to be carefully reviewed and integrated with any new legislation and systems upgrade. Secondly, any modernization of the customs systems should encompass the alignment of Customs procedures and documents with international standards, conventions and other instruments. Lastly, the introduction of Customs Automation by KRA should ensure that the systems it adopts are compatible with what other governmental departments and private sector stakeholders, whose activities involve Customs operations have.
Factors affecting container dwell time at the port of Mombasa
(KESRA/JKUAT - Unpublished research project, 01-10-18) Iroto, Irine
The Port of Mombasa is the gateway and exit point for cargo belonging to a vast hinterland of Kenya, Uganda, Rwanda, Burundi, Democratic Republic of Congo, Tanzania, South Sudan, Somalia and Ethiopia. Therefore, the performance of the port of Mombasa is critical to facilitation of trade within this region and also as a node linking it to international trade. There are a number of indicator of port performance and efficiency and this focused on one such indicator of dwell time, in particular container dwell time. In studying factors affecting container dwell at the port of Mombasa, the study covered such factors as port clearance procedure, port container handling machinery and port terminal operations with the aim of unearthing their influence and recommending actions that will fundamentally contribute to improved port service delivery to all port users. The study targeted a population of 300 people drawn from Kenya Ports Authority (KPA), Kenya Revenue Authority (KRA), Kenya Association of Manufacturers (KAM), Kenya International Freight and Warehousing Association (KIFWA), Shippers Council of Eastern Africa (SCEA) and transporters (roads) servicing the Northern Corridor Region. A sample size of 20% was chosen for the study that took four weeks with questionnaires being used as the main data collection instrument and the researcher administered questionnaires to 60 sampled respondents where only 49 filled and returned giving a response rate of 81.67%. The data analysis included descriptive and inferential statistics where the findings were presented in tables and figures. From the research findings, the study concluded all the independent variables studied (port clearance procedure, port container handling machinery and port terminal operations) have significant effect on container dwell time as was indicated by a very high coefficient of determination (R2) value of 0.768 (76.8%) and an overall p-value of 0.002 thus indicated the relevance of the studied variables, significant at the calculated 95% level of significance. Stepwise in view of the research findings, the study can conclude from the multiple regression analysis that all factors affected positively the container dwell time at the port of Mombasa with port clearance procedures being the highest influence with factor value of 0.934 with all other factors held at zero. The study recommended that concerning the port clearance procedure there is need to maintain a better port information system through strengthening the Integrated Customs Management System (ICMS) by having all processes of KPA and KRA agencies handled within a single platform. Further recommended is that in improving the port container handling machinery there be need by KPA for adoption of the most modern technologies and machinery in the market. Finally there should be ensured seamless port terminal operations through enforcement of the rule of ships not to be allowed to berth before the submission of manifest. And since it was found that only 76.8% of results were explained by the independent variables in the study, the study therefore recommended the need to carry out studies on other possible factors on container dwell time that will target private sector and other government agencies that have a direct influence on container delivery from/to the port of Mombasa through the Northern Corridor. These researches will involve studies on how the introduction and implementation of the Single Custom Territory is impacting on container dwell time at the port of Mombasa and pre-arrival clearance of goods and its impact on port terminal operation in terms of planning and container handling as related to container dwell time at the port of Mombasa.
Factors Affecting Customs Revenue in Kenya
(KESRA/JKUAT - Unpublished research project, 01-10-18) Sindiga, Edwin
This study sought to determine the factors that affects the customs revenue collection in Kenya by using a panel gravity model with monthly time series data spanning 2010-2017. Empirical analysis shows a positive impact of the quality standards on revenue (29%) but negative on import values by (11%) in Kenya. The positive effect on revenue post quality standards period translates to an increment of Kshs 79 Billion from January 2016 to June 2017 cumulatively. The decline in imports is explained by restrictive import standards that have netted out low quality imports. Consequently, the revenue yield per shilling import (proportion of trade revenue to CIF values) has increased from 0.19 cents in pre quality standards period to 0.23 cents post quality standards period. On the other hand, procedural trade barriers associated with import standards have also contributed to imports decline. Several administrative and operational challenges were identified in this research. Therefore, the research paper recommends that management should address administrative challenges, seal legal loopholes and capacitate quality standards unit to undertake 100% imports verification.
Influence of managerial challenges on collection of customs duties in customs & border control department of Kenya Revenue Authority
(KESRA/JKUAT - Unpublished research project, 01-10-18) Vikiru, Pamela
The key functions of the management of any organization include planning, organizing and control. The functions contribute to the achievement of goals of the organization. Despite endeavors to ensure that revenues collection at Kenya Revenue Authority (KRA) meets revenues collection targets, meeting the targets has been elusive. This study sought to determine how managerial challenges affected the achievement of the revenues collection objectives at KRA. The study had three specific objectives: to determine how planning and forecasting challenges affect collection of Customs duties; to establish how coordination challenges influence collection of Customs duties; and to establish the relationship between internal control challenges and collection of customs duties. The study was conducted at KRA. The study adopted the descriptive research design which applied survey methods. Primary data used in the study was collected by use of a self-administered questionnaire on a sample of 62 top and middle level management staff at KRA headquarters. The data were analyzed using summary statistics such as the mean and standard deviation. The relationship between planning and forecasting challenges, control challenges and internal control challenges and collection of customs duties was done using linear regression analysis. The findings indicated that procedures for the planning and forecasting process was not clear; that top management did not take keen formal responsibility for planning and forecasting; and that goals and targets were not always realistic and challenging. The study also found that frequent problems included getting in touch with partner organizations when needed and that, generally coordination was a great challenge. Further, management had not established effective reporting lines, and appropriate authorities in pursuit of objectives. KRA had also not demonstrated strict commitment to integrity and ethical values. The study recommends putting mechanism in place at KRA to strengthen planning and forecasting, control challenges and internal control challenges if they are to improve the achievement of customs duty collection targets.
Effect of trade facilitation on export performance in Kenya
(KESRA/JKUAT - Unpublished research project, 01-10-18) Chege, Michael
This study addresses trade facilitation on export performance in Kenya by tracking the achievements and implementation using Kenya as a case. The study uses descriptive research design and data for the study were mainly secondary data. The study found that as a result of implementation of trade facilitation initiatives, performance in trade, FDI inflows and trade taxes collection in all EAC countries have improved significantly. Kenya is performing well than the rest of EAC countries on external border agency cooperation, governance and impartiality while Tanzania performs better than other EAC countries in FDI inflows and contribution of export to the Gross Domestic Product (GDP). The study found a significant positive relationship between countries’ trade facilitation and export performance. Facilitation was found to have no significant relationship on FDI flows. The major setbacks of trade facilitation are non-tariff barriers, transport infrastructure, inadequate human resources capacity, and low level of automation.
Effect of automation reforms on service delivery
(KESRA/JKUAT - Unpublished research project, 01-12-18) Mathaiya, Leah
The Customs & Border Control department is a critical department of Kenya Revenue Authority in terms of manpower, revenue collection and countrywide operational network. The department plays a critical role in the facilitation of trade through allowing goods entry into the country from diverse Kenya’s trading partners such as China, and Turkey among other countries. The items that are brought into the country include electronic goods, cars, clothes, and house utility items among other items. The ability of the Customs department to deliver on its mandate is therefore extremely key to the country. Therefore, this study sought to examine the customer experience aspects influence on the public service delivery. Among the aspects that influence the customer experience include automation reforms at customs, waiting time management and staff training aspects. The theoretical framework of the study will be based on the institutional theory, Expectancy Dis-confirmation Theory (EDT) and Stakeholder theory. The study was based on the descriptive research design. The accessible population of the study was 204 clearing agents. A sample size of 105 respondents was used in the study. A structured questionnaire was used for the study. The Cronbach alpha coefficient of 0.7 and above was used for the study. Data was analyzed using SPSS software.
Effect of anti –dumping strategies on custom revenue collection in Kenya
(KESRA/JKUAT - Unpublished research project, 01-12-18) Soi, Richard Kipkoech
The purpose of the study was to examine the effect of antidumping strategies on custom revenue collection in Kenya. The study was guided by the following research questions: how does adoption of countervailing duties strategy affect custom revenue collection, to what extent does use of penalties affect custom revenue collection, what is the effect of quota tariffs strategy on custom revenue collection. The study will utilize customs union theory and absolute & comparative theory. The study adopted a descriptive research design. The population of the study was 200 employees of KRA. This study adopted a stratified sampling technique to select a sample size of 170 respondents. A structured closed ended questionnaire was used to collect primary data. At the same time, primary data will be collected through use of questionnaires. At the point of data analysis, tables, and graphs will be considered. The findings on the extent to which countervailing duty affects custom revenue collection revealed a statistically significant relationship between countervailing duties and custom revenue collection. Majority of respondents believed that when an organization used this mechanism properly will lead to the reduction of dumping and growth of industries thus leading to enhance domestic industries competitiveness. The findings on the extent to which penalties strategy affect custom revenue collection revealed a statistically significant relationship between penalties and custom revenue collection. Many of respondents believed that when the government put stringent measures in place enhances compliances essential in the domestic industries growth and competitiveness. Equally, domestic industries survivals depend on the imports restriction which may have detrimental effects on their growths. The findings on the extent to which quota system strategy affect custom revenue collection revealed a statistically significant relationship between quota system and custom revenue collection. Majority of the respondents believed that systematic quota system is essential in enhancing domestic competitiveness. Most of the respondents believed that a suitable quota system strategy enhanced domestic industries performances while at the same time reducing chance for imports dumping. This study concludes that countervailing duties is an essential component of the organization antidumping strategy that enhanced custom revenue collection. Countervailing duties enhances competitiveness of domestic industries and promote legitimate trade which allows domestic industries to thrive in the country. This study has demonstrated that when the country invested in countervailing duties mechanisms, revenue collection performances is enhanced. This study concludes that penalties are important and essential in the country that is seeking to develop and enhanced revenue collection. Penalties mechanisms put in place by the organization do not only enhance revenue collection but guarantee future domestic industries performances. This study concludes that quota system is important to custom revenue collection. The reveals at through quota system played an important role in the reduction of dumping. Therefore, this study concludes that the relationship between quota system and custom revenue collection is statistically significant. The study recommends that available antidumping programs should be strengthened in order to reduce dumping in the country. In addition, antidumping strategies are critical component that determine the success of domestic industries and should not be ignored. Furthermore, it is equally important that Kenya should benchmark with other countries who have successfully implemented antidumping laws.
Effect of Customs Risk Based Management Systems on Trade Facilitation in Kenya Revenue Authority
(KESRA/JKUAT - Unpublished research project, 01-12-18) Ogoti, Thaddeus Nyatwanga
The main challenge in the Kenya Revenue Authority, Customs Management and administration, especially in the last recent years, has been how to balance between the needs for trade facilitation as expected of by the World Customs Organization, WCO, to facilitate legitimate international trade as a process by the adoption of simplification, standardization and unification of documents and procedures in the internationally traded goods on one hand and the level of Customs Controls and interventions to be applied. The main aim of this study was to establish the impact that risk based clearance procedures have on the performance of the port. Specifically, on the time taken for clearing of goods, protection against prohibited and restricted goods. The study used descriptive research method which involve qualitative and quantitative data analysis. The data collection method was through the use of questionnaires and analyzed using SPSS. The study found out that risk based factors such as country of origin, the nature of commodities, the clearing agent, the importer and the historical data found in the system.
Effects of internal controls on revenue collection in Kenya customs administration
(KESRA/JKUAT - Unpublished research project, 01-12-18) Chepkwony, Kibet
Internal Controls play an important role in every organization as it assists in realization of their financial performance goals. The main objective of this study is to examine the effects of internal controls in operation in Kenya Customs Administration with specific reference to Inland Container Depot with a view to establish if such internal controls have a significant relationship with revenue collected. Specifically, the study assessed the effect of the Physical control, segregation of duties and internal audit on revenue collection. In view of the above objectives of the study, the researcher conducted a census for the study since the population of 53 of the employees at ICD is manageable. Data was collected from the respondents using self-administered questionnaires from the Inland Container Depot employees. Data was coded and entered into Statistical Package for Social Sciences (SPSS, version 20.0. Data was analyzed using descriptive statistics (mean and standard deviation) and inferential statistics (correlation analysis and multiple regression analysis). The results were presented in charts, graphs and tables to ease interpretation. Multiple regression analysis was used to establish the relationship between internal controls and revenue collection in Kenya Customs Administration at Inland Container Depot. The study findings established a positive and significant relationship between physical control and revenue collection at Inland Container Depot. Findings also showed a positive and significant relationship between Segregation of duties revenue collection at Inland Container Depot. There is also a positive and significant relationship between internal audit and revenue collection at Inland Container Depot. Correlation analysis findings show that the independent variables (physical control, segregation of duties and Internal Audit.) contributed to 75.7% of the variation in Revenue Collection as explained by adjusted R2 of 0.757 which shows that the model is a good prediction. This therefore reveals that other factors not studied in this research contribute to 24.3% of the variability in the Revenue Collection. The study therefore recommends that there is need for the Kenya Customs Administration to ensure suitable environment where internal controls are monitored for the improvement of revenue collection.
Effects of container freight stations on performance of Mombasa Port
(KESRA/JKUAT - Unpublished research project, 31-10-18) Musyoka, KenMorris M.
The port of Mombasa has been faced with inefficiencies through its operation, with congestion being a major problem. The adoption of the CFSs to help curb these problems at Mombasa port was meant to improve the port performance by eliminating such inefficiencies, years down the line after the adoption of these CFSs such inefficiencies among others are still being felt at the port having some stakeholders criticizing the operation of CFSs. The research sought to investigate the effects of the container freight stations on performance of Mombasa port with the specific objectives focusing on investigating the effects of Container Freight Stations Storage on Performance of port of Mombasa, determining the effects of customs clearance speed at the Container Freight Stations on Performance of Port of Mombasa and establishing the effects of CFS Cost on Performance of Port of Mombasa. The questions that the research sought to answer; to what extent do the Container Freight Stations Storage affects the performance of Port of Mombasa? To what extent has the customs Container Freight Stations Clearance Speed affected the Performance of Port of Mombasa? To what extent has the CFS Cost affected the Performance of Port of Mombasa? A descriptive design was used for the study, using a stratified random sampling technique to obtain sample size of 198 respondents from a population of 470 respondents, where the respondents were sampled across all strata which included KRA operations and KPA staff, various operational CFS and Clearing & Forwarding agents operating within Mombasa whereby the response rate of the study was 68%. The study largely relied on primary data collected using a closed end structured questionnaire. Collected data was analyzed using the SPSS 25 and the relationship between the variables examined using the Correlation analysis and regression analysis. The linear regression model used to describe the relationship between the independent variables (Container Freight Stations’ Storage, Customs Clearance Speed and Cost of Clearance) to the dependent variable (Port Performance). The study findings indicated that the independent variables explain 61.8% of the dependent variable. CFS storage was found to be affecting the Port Performance by 33.7%, Customs Speed of Clearance having 40.1% while CFS cost of Clearance 16.7%. the Regression analysis results are supported by the Correlation analysis which shown a strong relationship between the independent variables and the dependent variable for the variables CFS Storage, CFS Customs Clearance Speed and CFS Cost having coefficient of correlation r of 0.638, 0.700 and 0.530 respectively. The researcher therefore recommends on efficient utilization of the CFSs so as to improve the performance of the Port of Mombasa. Improvement on the CFS cost through revision and moderation of charges to importers, while reducing the Cost of Clearance, the customer satisfaction. The number of customs officers at the CFSs can be improved so as to improve the speed of customs Clearance further.
Effects of risk management system on Customs declaration violations at Kilindini port, Mombasa
(KESRA/JKUAT - Unpublished research project, 31-10-18) Ondiek, Winnie Beryl
This study sought to establish the effect of Risk Management System in Customs Declaration Violations at Kilindini Port, Kenya Revenue Authority Customs and Border Control Department. Due to challenges faced by the department in revenue collection because of risk factors. Additionally, the widening objectives of Customs has changed dramatically especially in the trading environment, how goods are carried as well as traded, the pace of the trade transactions and the volume of the various goods that are traded. In the previous years, significant transformations in the global trading practices including Customs administrations have been obligated to continually adapt the best practises in all of its operations. This is in order to maintain its effectiveness as well as relevance. It is in this pursuit that risk management system is a necessity to function as it is designed to be, to help in achieving the objectives and in utilizing the Risk management framework, this study assessed the effect of Risk management system on customs declaration violations at Kilindini , with a view to treat the violations. The study relied on quantitative data collection, analysis, discussion and reporting levels. It used interview, questionnaire, observation strategy and review of diverse documents to assemble data from 63 respondents. Bearing in mind the importance placed on the above essential practices of risk management system, KRA customs is indeed in dire need for a solution to help retain compliance and detect customs declaration violations. The study formulated a risk management system model for customs that will help KRA customs channel risks according to their magnitude and employ appropriate treatment. This will further focus efficient risk management framework and strengthen risk management capacity, enhance interagency cooperation and information-sharing, Accurate information on risks and intelligence, enhance compliance among traders and authorized operators. From analysis, the findings showed that all factors ‘Risk assessment’, ‘Risk profiling’, and ‘Risk targeting’ could be used to minimize risk violations at Kilindini Port, Kenya Revenue Authority Customs and Border Control Department. The most significant one and influential as regards to effect of risk management system in customs declaration violations was risk assessment with a significant correlation of -0.133, followed by risk profiling with a correlation of -0.725 and finally risk targeting with a correlation of -0.169. The same trend was depicted in regression analysis. Therefore, grounded on these findings, there exist an inverse relationship between the variables, whereby when there is control; customs violations will significantly drop. Organizations that intend to implement risk management system can now choose to focus on factors that will best affect risk management system. Customs declaration form C17B is essentially the mother of all, and the first contact document between customs and the importer and exporter of goods and services. Without this crucial document, no operation can occur. It is for this crucial reason why any violation or inconsistencies detected in the form is a driving pointer to a potential risk that must be addressed accordingly to the laws and regulations, to curb loopholes for revenue loss.
Factors affecting Customs release of goods at Namanga Border Post in Kenya
(KESRA/JKUAT - Unpublished research project, 2018) Kaigai, Brian Wamunyu
This study was done to assess the factors affecting customs clearance of goods at Namanga border post. Specific objectives were; to find out to what degree information available on customs procedures affect release of goods at Namanga border post; to establish to what extent the level of Pre Shipment Inspection affects customs release of goods at Namanga border post; to establish to what extent the level of technology is a factor affecting customs release of goods at Namanga border post; to establish to what extent the goods type affects the customs clearance times at Namanga border post; to find out to what extent is shipment release a factor affecting the customs release of goods at Namanga border post. Primary data was collected from Namanga at the Kenya Tanzania border. The research design used was an exploratory research design. The target population of the study were 61 respondents compromising of 30 clearing and forwarding staff, 30 customs officers based at the border post and 1 senior manager from K.R.A. Respondents were chosen using the purposive sampling method, the main data collection instrument used was a questionnaire. Qualitative data gathered from the questionnaire was analyzed using document analysis and quantitative data was analyzed using SPSS (Statistical Package for the Social Sciences). Key findings from the research indicated that inspection and goods type were the factors with the greatest impact on customs release at Namanga border post. 85.7% of respondents felt that inspection affected customs clearance while 42.9% felt the type of goods affected customs release, further statistical analysis of both factors gave a correlation factor of .884 an almost perfect linear relationship. Technology was cutting both ways in the clearance process speeding up clearance as well as delaying clearance due to frequent downtime, shipment release was not a commonly used method of getting goods across the border.
Factors Influencing Container Terminals Efficiency in Kenya: A Case of Mombasa Port
(KESRA/JKUAT - Unpublished research project, 2018) Muli, Carolyn Mueni
The aim of Containerization of ship cargo was to cut down the costs of maritime transport by reducing cargo handling costs Levinson, (2010). Instead of loading/unloading each piece of transport item to or from a ship in a labor-intensive manner, Containerization increases the efficiency and speed of transport by reducing the packing requirements and handling processes at all transfer points. However, the deployment of larger ships demands huge investment in providing greater depth alongside the berth of the calling ports as well as more powerful quay cranes with long outreach and lift height (UNCTAD, 2006). The objective of the study was to assess the factors influencing container terminals efficiency in Kenya using a case of Port of Mombasa. The Specific objectives were to determine the influence of cargo handling equipment on container terminal efficiency, to establish the influence of training of training and technical skills of terminal operators on container terminal efficiency, to find out the influence of infrastructural facilities on terminal efficiency and to establish the influence of customs clearance procedures on container terminal efficiency. The study applied Efficiency Theory, Productivity Theory and Envelopment Analysis Theory for the study. Quantitative research techniques were used during data presentation using inferential statistics to draw conclusions from the nominal measurement scale. Stratified sampling technique was used to identify and select eligible participants for the study sampling since it allowed the researcher to choose subjects who are in the best position to provide information required. Reliability was tested using Cronbach’s Alpha. Inferential statistics such as Pearson’s correlation and multiple regression analysis was used for further analysis. Data was analyzed using statistical packaging social sciences software (SPSS) version 23 to find the relationships and averages of the data in addition to tabular presentations for understandable presentation. The findings indicated that the independent variables which were equipment, training and technical skills, infrastructural facilities and customs clearance procedures had a significant influence on container terminal efficiency. The study revealed training and technical skills had the highest performance therefore its role in terminal efficiency is very important and should be given more attention. The study found out that equipment was a crucial element at the Mombasa port and they needed to be upgraded. Also it was recommended that the government and other key stake holders needed to invest in robust infrastructure to increase connectivity in the region and spur economic growth.
The Influence of Electronic Cargo Tracking System on tax compliance in Kenya Revenue Authority
(KESRA/JKUAT - Unpublished research project, 2018) Mwatha, Rachael W.
Electronic Cargo Tracking System has the potential to precipitate a radical shift in KRA processes, operations and tax compliance at large. However, based on preliminary surveys the Electronic Cargo Tracking System is becoming expensive to maintain, staff are complaining that they are not sufficiently trained, thus more susceptible to manipulations from unscrupulous persons with expert knowledge of the system and a huge gap in research as regards the extent to which Electronic Cargo Tracking System affect tax compliance. Thus, the study purposed to establish the influence of Electronic Cargo Tracking System (ECTS) on tax compliance. Specifically, it sought to establish the influence of implementation costs of Electronic Cargo; staff training on Electronic Cargo Tracking System and reliability of the system on tax compliance at KRA. Technology acceptance model and institutional theory were the theories that anchored the study. The study adopted descriptive research design and the target population of this study consisted of all 268 employees at ECTS offices in KRA Customs & Border Control Department and officers stationed at the Port of Mombasa and border stations namely Malaba, Namanga and Busia. The sample size for the study was 81 employees who were selected by use of proportionate stratified random sampling. This study employed the use of questionnaires as data collection instruments to gather the requisite information. Secondary data was gathered on the amount of tax compliance at KRA. To thus establish content validity of this study’s instruments, two experts on the topic from KRA scrutinized the content of the instruments and offered expert advice to the researcher on the content validity. To establish reliability of research instruments the Cronbach’s coefficient alpha was used. Quantitative data was analyzed using descriptive analysis using the statistical tools of percentages and frequencies, means and standard deviations. Both correlation and linear regression analyses were used to test for both relationship and predictor element for the independent variables and the dependent variable respectively. The results show that: that high implementation cost of ECTS had a significantly negative influence on tax compliance at KRA. Lack of sufficient staff training on ECTS had a significantly negative influence on tax compliance at KRA. The reliability of ECTS had a significantly positive influence on tax compliance at KRA The study recommends that: KRA should continue to implement the creative elements of Electronic Cargo Tracking System to further improve the quality, timeliness and reliability of ECTS. They should do this by reducing the implementation costs so as to ensure the system has wide ranging acceptance. KRA should embark on proactive staff training on the use of ECTS to ensure that they eventually use the system effectively. The staff themselves should also ensure that they get self-managed training to keep abreast with the changing requirements of the system. KRA should continue to invest in Electronic Cargo Tracking System and though the investment appears costly, research has shown clearly that it will be worth it in the long run. The government should both initiate and implement workable strategies that curbs unwarranted and unhealthy tax compliance among tax payers.
Factors affecting performance of Customs and Border Control department in Mombasa
(KESRA/JKUAT - Unpublished research project, 2018) Mutulu, Francis Matata
Performance of customs administrations has been given much attention in the contemporary International trade in facilitating through reduction of cost of doing business across country’s borders in different parts of world. Customs administrations have adopted modernization and streamlining of customs processes to reduce trade costs and time while increasing revenue flow. This study aimed at assessing factors affecting performance of Customs and Border Control department in Mombasa. The specific objectives of this study were to establish the effects of customs legislation, customs management and customs information systems on performance of Customs and Border Control department. The study sought to answer to what extent each independent variable, customs information systems, customs legislation and customs management affected the performance of customs and border control. The main theories used in the study are Technology Acceptance Model, Institutional theory and open systems theory. The target population was 280 customs officers working at the Mombasa. Stratified random sampling was applied and a sample of 59% was interrogated using self-administered questionnaire. Data collected was coded and systematically organized so as to facilitate data processing using Statistical Package for Social Sciences (SPSS) version 25. Data was analyzed using multiple regression analysis where dependent variable was regressed on independent variables. The study found out that independent variables account for 59 percent variations in dependent variable. The F value of 54.181 indicated that joint contribution of all the independent variables was significant in predicting the dependent variable. The independent variables which affected significantly the performance of Customs and border control department were customs information system (β1 = 0.202), customs legislation (β2 = 0.325) and management (β3 = 0.254). These findings indicate that the three independent variables are significant in enhancing performance at customs and border control and may help in improving the performance of customs and border department. The researcher recommends increased employment of information systems in customs processes for efficient transactions and reduced tax fraud. All relevant information of general application relating to customs legislations is also recommended to be readily available for all interested parties so as to reduce disparities in application of the legislation hence reduced cost and time incurred in customs transactions. The study also recommends improvement of staff competency through training, continuous involvement of staff in seminars and workshops which will eventually result to effective and efficient service delivery.
Factors influencing performance of single window system in Kenya - a case of inland container depot Embakasi.
(KESRA/JKUAT - Unpublished research project, 2018) Rono, Kipkoech
The purpose of this study was to establish factor influencing performance of single window system in Kenya. Despite the Kenyan government implementing single window system in 2014, cargo clearance still remains lengthy and faces delays in crossing the borders. The Specific objectives were to find how procedures, SWS requirement and system downtime affect single window performance on cargo clearance across borders. The target population of this research consisted of 74responded all drawn from customs officers, Kenya port authority offices and clearing agents based at ICD Embakasi. The study employed random sampling technique, which was appropriate in coming up with a sample for the study as it gives an equal opportunity for each custom officer to be selected. The study collected primary data which was analyzed through content analysis. Primary data was collected through questionnaire administered. The study employed SPSS for data processing and ANOVA statistical application applied in data analysis. The R square was found to be 77.2% implying that 77.2% of the factors under study were explained by the model. The study found that customs procedures, single window system requirement and system downtime had significant influence on the performance of single window system in inland container depot Embakasi. The study recommends high involvement, consultations in bringing all single window stakeholders on board and sailing in the same direction. Striving to have a paperless operation and fully electronic and harmonized procedures is a step-in enhancement of single window system performance. This is key for the success performance of single window system as it will eliminate manual procedures and duplication of data submitted to authorities involve in clearance. The study also recommends networking with more than one and reliable service providers, adoption of latest technology and regular monitoring and update of the technology. This will curb delays in clearance brought by system downtime hence ensuring system efficiency. Installation of UPS and modern standby generators will be a step in the direction as it facilitates continuous clearance of cargo as well as exchange of electronic information.
Effect of Post Clearance Audit On Revenue Collection in Customs and Border Control Department in Kenya
(KESRA/JKUAT - Unpublished research project, 2018) Mashalia, Conrad Lugonzo
Customs and border control that do not use audit-based controls usually concentrate their controls entirely at the border and at the time of import, and often apply a 100% physical examination approach. This leads not only to unnecessarily long delays at the border but is also a very ineffective and inefficient use of the limited control and inspection staff at the border. This led to the adoption of post clearance audit (PCA) in Kenya Revenue Authority. This study therefore sought to establish the effect of post clearance tax audit on revenue collection in the Kenyan customs department in Mombasa. The study also sought to determine the effect of post-importation transaction verification, customs desk audit and customs onsite audit on revenue collection in the Customs Services Department at times tower and JKIA. This study used a descriptive research design. The population of this study was 500 respondents; this included staff of clearing and forwarding firms at JKIA and customs staff at times tower. This study used stratified random sampling to select the 30% of the target population. The sample size of this study was therefore 200 respondents of which 150 responded. Semi-structured questionnaires was used in this study to collect primary data. Content analysis was used to analyze qualitative data and the findings were then presented in a prose form. On the other hand, Statistical Package for Social Sciences (SPSS version 20) was used to analyze quantitative data. Using this program, quantitative data was analyzed using inferential and descriptive statistics. Descriptive statistics such as mean, standard deviation, frequency and percentages were used in this study. In relation to inferential statistics, the study used correlation analysis to establish the relationship between the independent and the dependent variables. Data was then presented in tables, bar charts and pie charts. The study established that customs field audit influences revenue collection at customs services department most followed by customs post-importation transaction verification and customs desk audit. The study also established that post importation transaction verification lead to an improvement in revenue collection and reduces the amount of time it takes to clear goods and hence recommends that the management of the customs department should ensure that the post clearance audit procedures are followed to the letter. The study further recommends that the government of Kenya should formulate more policies to support and govern customs field audit and audit visits.
Influence of Customs Trade Facilitation Activities On Transit Time Along Kilindini -Malaba Route
(KESRA/JKUAT - Unpublished research project, 2018) Ochieng, Victor A
The 2014 Northern Corridor Trade and Transport Logistics Stakeholders’ Survey highlighted challenges of delays in manifest approvals for containerized vessels from submission of import declaration forms to when KENTRADE maps it on the KRA systems (NCTTA, 2014). Consequently, vessels bunch at the Kilindini Port because of the long waiting time. Non-approval of pre-clearance of cargo by the KRA customs was highlighted as a major challenge. Further, the study highlighted the challenge on non-automatic cancellation of bonds after goods successfully leave Kenyan territory that causes much delays. Regarding the integration of information technology, the study highlighted slow integration of ASYCUDA and SIMBA for transit goods. These findings that point to long transit time between Kilindini and Malaba prompt the necessity to audit and assess the measures set by customs and border control department to facilitate transit trade. In this context, this study sought to determine the influence of customs trade facilitation activities on transit time along Kilindini-Malaba Route. Based on Article 11 of AFT, transit processes should conform to international best practices. Transit, being a key customs process, should be regularly subjected to performance measurement in an attempt to highlight areas of improvement. The framework set by the OECD’s transit-specific performance indicators form a reasonable benchmark upon which to measure the performance of transit formalities. Implementing the best practices set by the OECD would result to a transit system that is facilitative to trade as outlined in Article 11 of ATF and responds to challenges facing the 21st century customs. In essence, a highly facilitative transit management system should result to shortest transit time. In Kenya, the customs and border control department has set diverse trade facilitation activities to ensure transit goods from Kilindini port destined to partner states through Malaba border are cleared within the shortest time. This study intends to determine the influence trade facilitation activities on clearance at the port, on transit guarantees and on clearance at the border on transit time along Kilindini-Malaba transit route. Based on review of literature, it is ascertained that the Jordanian transit system is ideal in ensuring the shortest transit time and responds to 21st century challenges to customs’ operations. The target population in the study were 150 licensed clearing agents trained authorised to lodge transit entries from Kilindini through Malaba to partner states, both on Simba 2005 and partner states’ systems platforms on the Automated System for Customs Data (ASYCUDA) under electronic single window system since December 2017. Study adopted survey design by use of questionnaires administered to sample size of 109 clearing agents who lodge transit entries through Single Customs Territory using ASYCUDA and Simba 2005. A total of 74 valid filled questionnaires were collected and analysed. The results from the questionnaires were analysed using Statistical Package for Social Science (SPSS) software version 20. From the analysis, there existed a strong positive relationship between transit clearance at the port, transit guarantees and transit clearance at the border, and transit time. A linear regression model was derived being, transit time=5.181 + 0.180 clearance at the port + 0.459 transit guarantees + 0.57 transit clearance at the border. This study sets the Kenyan customs administration at a credible position for its constant efforts to implement diverse transit-specific trade facilitation measures particularly along the Kilindini-Malaba section of the Northern Corridor. Focus should be on constant improvement of trade facilitation activities related to transit clearance at the port, transit guarantees and transit clearance at the border to reduce, to minimum, the transit time as recommended under Article 11 of ATF on “Freedom of Transit.” The full integration of SCT is a plausible to advance to electronic single window system to lodge transit goods. It is recommended that a further study be carried out on the influence of having an East African Regional AEO status by clearing agents on transit time along Kilindini-Malaba route.
Effects of Cargo Diversion On Revenue Performance in KRA: Case Study Of The Customs And Border Control Services Department
(KESRA/JKUAT - Unpublished research project, 2018) Kipsigei, Teresa
The advent of maritime and cross-border trade has brought intense pressure on governments to fundamentally change how they manage the cargo that move across so as to mitigate loss of revenue as well as enforce security in the dynamic business environments across international boundaries. Revenue collected is at the center stage in Kenya’s long-term development goals this is evident especially in the national policy strategic goals known as vision 2030. Vision 2030 aims at transforming Kenya into an industrialized middle income that enabled the country to be able to develop and compete global with the other developing nations. To be able to sustain development in parity with the expected levels, Kenya must maximize on revenue collected and reduce tax evasion incidences. One such key revenue collected is customs duty. This refers to taxes levied on imported or exported goods. The two types of customs duties collected under international trade are import and export duty. The duties are listed in the country’s tariff schedule. Duties may be ad valorem or specific. Cargo diversion is an unacceptable trade practice because it undercuts government revenue and discourages private sector investments in the oil and gas free zones. The objective of the study is to determine the effect of cargo diversion on revenue performance, focusing on the Customs and Border Control Services Department at KRA. The main objective of the study was to assess the causes of cargo diversion in Kenya, determine extent to which cargo diversion influences on revenue performance and determine challenges faced on cargo diversion management. The study was informed by Technological Determinism and Queuing Theory. This study adopted an explanatory design. The target population of this study comprised 1500 employees in KRA customs. Simple random was used to select a sample size of 110 employees. This study utilized only primary data which was obtained through questionnaire consisting of closed structured and open ended structured questions. The variables were tested for reliability by computing the Cronbach’s alpha statistical tests. Quantitative data was analyzed using descriptive statistical method, the statistical tools such as frequency distribution, tables. The data collected analyzed using regression analysis and correlation analysis.
Effects of Kenya national electronic single window system on performance at the Port of Mombasa
(KESRA/JKUAT - Unpublished research project, 2018) Maiyo, Julia ; Mumia Benn MINCU, CPA.K
Single window is one of the latest port systems aimed at simplifying trade processes for Kenya’s competitiveness at the port of Mombasa. In the year 2007 the country experience growth in international trade which increases the number of containers handled by KPA and those cleared by KRA customs at the port of Mombasa. The space was limited and vessel turnaround time was prolonged, traders incurred huge cost in business, processing of customs clearance takes more than 11 days prolonging cargo dwell time, diversion to neighbouring country like Tanzania Dar-es-salam port by some shipping line happens, therefore Kenyan government on modernization reforms in customs adopted Kenya National Electronic Single Window to facilitate electronic clearance of goods and this study was carried out to establish the effect of Kenya national electronic single window system on performance at the port of Mombasa. A target population of 1090 employees of different organization was used, which included Kentrade Mombasa, KPA, and KRA customs, KBS, KMA, Shipping agents and Clearing agents. A descriptive research design was adopted and systematic random sampling method was used to pick the sample size from 10% of the target population. Primary data was gathered using semi-structured questionnaires and data was analysed using both descriptive and inferential statistics. The findings revealed that, there was high positive correlation between the dependent variable and independent variables at 0.01 level of significance which was within the threshold P-value of 0.01 as per the Pearson Correlation. Therefore; this study concluded that, there is high positive correlation between manifest module, permit module and e-payment module on performance at the port of Mombasa