Uganda urges Kenya to scrap tea import levy

Thursday 20th January 2011

Uganda wants a permit levy charged on its tea shipments to the Mombasa auction scrapped to improve the competitiveness of its traders dealing in the commodity.

Ugandan traders eyeing supplies to the weekly tea auction are required to obtain a special plant import permit (PIP) from the Kenya Plant Health Inspectorate Services (Kephis) at a fee of Sh500 before they could be allowed to do so.

The fee is today charged per lorry load of tea, unlike the past when it was levied on a consignment of specified volumes.

Uganda said this arrangement by Kenya is hurting its tea industry by subjecting exporters to extra costs and delays at the border entry points.

“This has aggravated complaints regarding the existing NTB (non-tariff barriers) where there have been earlier calls to remove the charge,” a committee appointed by the Ugandan government to help clear hurdles to trade in the region said in a submission to the East African Community (EAC) secretariat.

According to Kephis, importers seeking to bring plant materials into Kenya must obtain a PIP prior to shipment of such plants from the origin regardless of whether they are duty free, gifts or for commercial or experimental purposes.

The permit specifies the requirements for plant health indicating prohibitions, restricted quarantine importation’s, and additional declaration with regard to pre-shipment treatments.

“Any plant consignment arriving in Kenya should therefore be accompanied by a copy of a permit by Kephis and an additional health certificate (Phytosanitary certificate, international model or its equivalent) in full adherence to the specifications set out in the permit,” the agency said.

“Diseased or insect infested plant materials irrespective of value will be destroyed at the point of entry or shipped back to the country of origin at the owners cost,”

Uganda, however, said the clearance procedure by Kephis was flawed and hindered trade because consignments of tea destined for Mombasa did not fall within the specification of plant material.

“The processing that the tea undergoes transforms it into a manufactured product which is no longer a plant. Manufactured commodities should not be required to have the PIP. The Kenya PIP is therefore inappropriately levied,” Uganda protested in its submission. “The charge should be abolished as tea is a manufactured product and not a plant. Kenya’s practice is not compliant with the WTO requirements on the application of sanitary and phytosanitary measures,”

It further said the permit requirement affected the flow of its tea exports to Mombasa through delays at the border.

“In addition to being a mandatory charge, the delay sometimes experienced at the border before it is issued disadvantages Ugandan traders destined for the auction market”

Traders at the auction in Mombasa said their counterparts from Uganda have raised complaints of the position by Kephis and demanded for redress.

“Traders from Uganda feel aggrieved because the permit fee raises their cost of business and cannot compete well at the auction. They are particularly concerned about the classification of processed tea as a plant,” Peter Kimanga, a trader, told the Business Daily.