Effect of systems automation on Customs revenue performance in Kenya
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Date
2020
Authors
Omosa, Askah Moraa
Dr. Ogaga, Bruce
Dr. Cheboi, Yegon
Journal Title
Journal ISSN
Volume Title
Publisher
KESRA/Moi University
Abstract
Customs mandate are revenue collection, border protection, collection of international
trade statistics and trade facilitation (Ayuma, 2018). 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 collection created a deficit
in government project’s financing affecting performance of customs revenues. This
study established the factors that affect the revenue performance of customs and border
control department in Kenya in terms of actual revenue collection, trade facilitation and
protection of the 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 by 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 were used out of which a sample of 227 respondents was selected, through 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) was found to have 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
R
2 =0.647) on revenue performance. Findings of the study established that custom
revenue performance in Kenya increased significantly after implementation of systems.
As a result, regional trade activities were intensified and greater border control
achieved. The Kenya Revenue Authority needs to ensure tighter enforcement measures
other than 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 was on the effects of Integrated Customs
Management System on the operational performance in East Africa. Further suggestion
for future research was on effects of Business Intelligence and Customs Oil Stocks
Information Systems on customs performance.