Effect of Systems Automation on Customs Revenue Performance in Kenya
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Date
2021
Authors
Omosa, Askah Moraa
Journal Title
Journal ISSN
Volume Title
Publisher
Kenya School of Revenue Administration_Moi University
Abstract
Customs mandates are revenue collection, border protection, collection of international trade statistics, and trade facilitation (Ayuma, 2018). The collection of revenues has been used as the apex yardstick for measuring the performance of Kenya’s customs and border control department. In the year 2016/2017 and 2017/2018, KRA missed its target by 18.5 billion and 15 billion respectively. This shortfall in the collection created a deficit in the government project’s financing affecting the performance of customs revenues. This study established the factors that affect the revenue performance of the customs and border control department in Kenya in terms of actual revenue collection, trade facilitation, and protection of society. It focused on establishing the effect of Scanner technology, Cargo Tracking System, and Integrated Custom Management (ICMS)on the revenue performance of the customs and border control department in Kenya. The general objective was to investigate the effects of systems automation on customs revenue performance in Kenya. The study had three independent variables which were Scanner technology, Cargo Tracking System, and Integrated Custom Management (ICMS). This study was grounded in three theories: Technological Determinism Theory, General Systems theory, and International Trade theory. The study adopted the explanatory research design A population of 902 clearing and forwarding companies and customs officers was used out of which a sample of 227 respondents was selected, through the Taro Yamane sampling method. The study used both primary data by use of structured questionnaires and secondary data obtained from relevant materials which represent academic research, with the selected period being 2017 to 2019. Data was analyzed into descriptive statistics and inferential statistics by use of SPSS (20) and presented in tables, pie charts, and cross-tabulation. The data was equally tested for validity and reliability using the Cronbach Alpha Score as the test for reliability. Scanner technology (β1=0.451, p=0.00), Cargo Tracking Systems technology (β2=0.303, p=0.00), and ICMS technology (β3=0.204, p=0.00) were found to have a significant effect on customs revenue performance in Kenya with a P value of less than 0.05 for all variables. The results also revealed that scanner technology, cargo tracking system, and integrated customs management system caused a variation of 64.7% or (R2=0.652 and adjusted R2 =0.647) in revenue performance. The findings of the study established that custom revenue performance in Kenya increased significantly after the implementation of the systems. As a result, regional trade activities were intensified and greater border control was achieved. The Kenya Revenue Authority needs to ensure tighter enforcement measures other than the implementation of systems such as scanners, Cargo Tracking Systems, and ICMS. In conclusion, systems automation comes with costs attributable to ICT infrastructure, synchronization hitches, training, and security enhancements. Nevertheless, their implementation is important in achieving revenue growth and operational efficiencies. Regional synchronization of systems as with the Regional Cargo Tracking System allows data sharing and greater global competitiveness.
Recommendations for further study were on the effects of the Integrated Customs Management System on the operational performance in East Africa. A further suggestion for future research was on the effects of Business Intelligence and Customs Oil Stocks Information Systems on customs performance.
Description
Keywords
Integrated Customs Management System, Non-collinearity, Regional Electronic Cargo Tracking System, Revenue Performance, System Automation, Transit Management, Scanning Technology