Kenya and Tanzania have seen a steady growth in revenue from cross-border trade since the introduction of the one-stop border posts (OSBPs) four years ago.
Kenya Revenue Authority’s deputy commissioner for the Southern Region Nicholas Kinoti told The EastAfrican that trade volumes have risen, revenue has doubled, and it has become easier to do business across borders.
There are OSBPs in Lunga Lunga, Holili, Busia and Isebania.
At the Lunga Lunga border crossing, tax officials have reported a 30 per cent increase in collections.
“In Lunga Lunga, we collect in excess of Ksh30 million ($300,000) per month, and in Taveta we collect Ksh10 million ($100,000),” Mr Kinoti said.
He attributed the increased revenue collection to improved infrastructure connecting the two countries.
“Currently, the formal traffic flow ranges between 500 to 700 people per day, depending on the timing and the season, both at Lunga Lunga and Taveta,” he said, adding that level of compliance by traders to pay taxes has also improved.
“We used to have less than 200 entries at Lunga Lunga and Taveta. The people crossing are commercial traders, but we also have small traders and people living at border areas who cross for social reasons,” he added.
Mr Kinoti said it was important for the two countries to remove barriers to trade to enhance the ease of doing business.
“It is important to promote simple Customs entry utilisation, where taxes are paid at first point of entry. This will enable goods to move freely. This would call for us to continue integrating technological solutions, including scanners and ICT, so that there is seamless flow of goods across the border,” he said.
However, porous borders that lead to smuggling of goods still remain a major challenge to sealing revenue leakage.
“We want to introduce surveillance devices in most of those areas. We are teaming up with other security agencies to do joint patrols and operations to address the challenge,” Mr Kinoti said.
But even as the government claims that the posts have improved efficiency, traders and people living at the borders have disputed this saying it has introduced bureaucracy and increased the waiting time for one to be cleared.
According to locals, who are mostly traders, the OSBP concept has failed since it has led to exploitation of Kenyan traders at Holili where they are charged twice before they arrive with their products at the market.