Customs Duty Compliance: Why It Matters for Your Business
In the dynamic landscape of international trade, understanding and complying with customs duty regulations is crucial for businesses involved in importing goods into Kenya and exporting to international markets from Kenya. Non-compliance can lead to significant financial penalties, delays, and disruptions in your supply chain. Here we will explain the essentials of customs duty compliance and how Frankbridge Advisory Limited can assist your business in navigating these complexities.
Customs Duty Compliance: What is Customs Duty?
Customs duty is a tax imposed on goods when they are transported across international borders. In Kenya, these duties are governed by the East African Community Customs Management Act (EACCMA) and the East Africa Community Common External Tariff (EAC CET). The primary purpose of customs duty is to protect local industries, regulate the movement of goods, and generate revenue for the government.
Consequences of Non-Compliance with Customs Duty Regulations in Kenya
Failing to comply with customs duty regulations can have severe consequences for your business, including:
Financial Penalties: Fines, backdated taxes, and interest charges that eat into your profits.
Operational Delays: Shipment holds, clearance bottlenecks, and supply chain disruptions that slow down your business.
Legal Actions: Risk of lawsuits, seizures, or even criminal liability for mis declarations or undervaluation.
Reputation Damage: A history of non-compliance can tarnish your credibility, making it harder to secure suppliers, investors, or government contracts.
How Frankbridge Advisory Limited Can Help
At Frankbridge Advisory Limited, we offer a comprehensive suite of services tailored to ensure your business remains compliant with customs duty regulations. These services include:
Guidance on import and export duties under Kenyan and EAC regulations
Accurate customs valuation and classification under EAC CET and HS codes
Application for duty exemptions, remissions, and incentives under EACCMA
Ensuring compliance with rules of origin (ROO) for preferential trade agreements
Comprehensive customs compliance reviews to avoid penalties and delays
Support for KRA post-clearance audits (PCA) to resolve compliance issues
Handling disputes, appeals, and negotiations with KRA on customs matters
Review of trade contracts to identify customs duty risks and tax implications
Registration of intellectual property rights (IPR) with customs to prevent counterfeiting
Customs training and regular policy updates to keep your business compliant
Read more on these services below:
Our Customs Duty Compliance Services:
- Import and Export Duty Advisory
- Tariff Classification and HS Codes
- Customs Valuation of Imports and Duty Assessment
- Duty Exemptions, Remissions, and Incentive Applications
- Rules of Origin (ROO) Advisory and Trade Benefits
- Regular Customs Compliance Reviews
- Post-Clearance Audit (PCA) Support and Dispute Resolution
- Handling Customs Disputes, Appeals, and Negotiations
- Trade Contract Review for Customs Duty Risks
- Intellectual Property Rights (IPR) Recordation and Brand Protection
- Customs Training
Import and Export Duty Advisory
Navigating Kenya’s import and export duty regulations can be complex, with various taxes, exemptions, and incentives at play. Many businesses either:
Overpay
Fail to take advantage of available tax reliefs
Both lead to unnecessary costs.
At Frankbridge, we provide expert guidance on import and export duty regulations under the East African Community Customs Management Act (EACCMA) and the East African Community Common External Tariff (EAC CET). Our team assesses your eligibility for incentives and assists in the application process, ensuring you maximise savings while remaining fully compliant.
Tariff Classification and HS Codes
Incorrect tariff classification can result in overpaying duty or facing penalties for non-compliance. Customs authorities use the Harmonised System (HS) codes under the EAC CET to determine duty rates, and misclassification can lead to costly disputes.
We analyse your products and assign the correct HS codes, ensuring accurate duty assessments and minimising risk. Our classification expertise helps businesses avoid delays at customs, unexpected costs, and compliance issues.
Customs Valuation of Imports and Duty Assessment
Many businesses unknowingly underdeclare or overvalue their imports, triggering disputes with customs and potential financial penalties.
The customs valuation process determines the correct amount of duty payable, but navigating the various valuation methods set by Kenyan law can be tricky.
We guide you through the process, ensuring accurate assessments that comply with customs regulations while preventing unnecessary overpayments or underpayments that could put your business at risk.
Duty Exemptions, Remissions, and Incentive Applications
Kenyan and EAC laws provide various tax relief programs for manufacturers, exporters, and businesses dealing with strategic goods, but many companies miss out due to a lack of knowledge or bureaucratic hurdles.
Whether you're eligible for the Duty Remission Scheme, VAT exemptions, or other reliefs under EACCMA, we handle the paperwork and engage with customs authorities to ensure you secure the benefits you qualify for. This helps lower your tax burden and improve cash flow.
Rules of Origin (ROO) Advisory and Trade Benefits
If your business engages in regional or international trade, understanding and complying with Rules of Origin (ROO) is essential to qualifying for preferential trade agreements.
Many companies struggle with documentation, leading to denied benefits or disputes with customs.
We assess your supply chain, help you meet ROO requirements, and resolve any issues with customs authorities—ensuring you take full advantage of reduced tariffs under trade agreements like the African Continental Free Trade Area (AfCFTA) and the EAC.
Regular Customs Compliance Reviews
A minor oversight in customs processes can result in hefty penalties, shipment delays, and potential blacklisting by authorities. Regular customs compliance reviews help businesses identify gaps and correct them before they become costly mistakes. Our team conducts thorough assessments of your import/export processes, ensuring you adhere to all regulations and avoid compliance risks that could disrupt your supply chain.
Post-Clearance Audit (PCA) Support and Dispute Resolution
The Kenya Revenue Authority (KRA) regularly conducts post-clearance audits to verify the accuracy of past import and export declarations.
If flagged, businesses often face backdated tax demands, penalties, and operational setbacks.
We provide support during these audits, helping you prepare documentation, respond to queries, and negotiate favourable outcomes. Our expertise ensures that you’re not caught off guard by unexpected tax liabilities.
Handling Customs Disputes, Appeals, and Negotiations
Disputes with customs authorities over duty assessments, tax classifications, or valuation issues can be time-consuming and costly. Without proper representation, businesses risk unfavourable rulings or excessive fines.
We step in to handle appeals, negotiate settlements, and represent you in engagements with KRA. Our goal is to protect your interests while ensuring compliance with customs laws.
Trade Contract Review for Customs Duty Risks
Many businesses sign supplier and distributor contracts without considering the customs duty implications, only to realise later that they are liable for unexpected taxes.
This can lead to financial losses, legal disputes, and supply chain disruptions.
We review your contracts before you commit, ensuring customs duty obligations are clearly defined and factored into pricing, preventing surprises down the line.
Intellectual Property Rights (IPR) Recordation and Brand Protection
Counterfeit goods flooding the market can damage your brand reputation and lead to revenue losses.
Kenya’s customs laws allow businesses to record their intellectual property rights (IPR) with customs to prevent unauthorised imports of counterfeit products.
We guide you through the recordation process, ensuring customs officials can identify and seize counterfeit goods before they reach the market—protecting both your brand and your bottom line.
Customs Training
Customs regulations change frequently, and businesses often struggle to keep up. Falling behind on new rules can lead to compliance breaches and missed opportunities for tax savings. We offer customised training sessions to equip your team with the latest knowledge on customs procedures, duty optimisation strategies, and compliance best practices.
Why Choose Frankbridge Advisory Limited?
Partnering with Frankbridge Advisory Limited offers several advantages:
Expertise: Our team possesses in-depth knowledge of customs regulations and procedures in Kenya.
Personalised Solutions: We tailor our services to meet the unique needs of your business, ensuring practical and effective compliance strategies.
Proactive Approach: We anticipate regulatory changes and prepare your business to adapt seamlessly, minimising disruptions.
Get in Touch
Don't let customs duty compliance challenges hinder your business operations. Contact us today to learn more about our services and how we can assist you in achieving seamless compliance.
Frequently Asked Questions on VAT Compliance Services in Kenya
What is customs duty in Kenya?
How are import duties calculated?
What are the consequences of under-declaring the value of imports?
How can I benefit from import duty exemptions?
What is the East Africa Community Duty Remission Scheme?
How can I ensure compliance with Rules of Origin?
What should I expect during a KRA post-clearance audit?
How can I protect my intellectual property rights in customs matters?
Ask us about our Customs Duty Compliance services.
