Tea traders at the Mombasa Tea Auction are counting losses after the collapse of the Kenya Revenue Authority (KRA) payment system, affecting the processing exports at Mombasa Port.

On Thursday, the traders said they had lost Sh2.9 billion ($23 million) in one week due to the delayed export of tea at the Port of Mombasa occasioned by the downtime of KRA payment systems.

The East African Tea Trade Association (EATTA), which runs the auction, said that 150 containers of tea could not be exported last week. 

EATTA Managing Director George Omuga KRA’s export payment systems (MSS levy) downtime, failure of the Port Scanners, and the perennial ICMS systems failure had resulted in container mapping challenges.

Omuga said the halting of exports will have negative ripple effects at the Mombasa Tea Auction, which may further depress tea prices that have recently shown improvements at the tea auction.

The MD said if the problem of delays in payment systems persists, they will be forced to call off the weekly auction, leading to a loss of Sh3.2 billion a week . 

He said despite the frequent meetings with organisation concerned nothing has been done to address the situation

“We have been engaging KRA, KENTRADE, and KPA Port Health who are involved in the export process. We need an alternative system that backs the ICMS. By Joackim Bwana, The Standard

The House team has approved the Road Maintenance Levy Fund (Imposition of Levy) Order, 2024 which seeks to increase the Road Maintenance Levy Fund rate from Sh18 to Sh25 per litre of petrol and diesel.

The approval of the legal notice will however not affect the fuel prices which would have ultimately caused uproar among Kenyans as the notice seeks to enhance the road maintenance levy.

The Committee on Delegated Legislation chaired by Ainabkoi MP Samuel Chepkong’a scrutinized the legal notice threatening to quash it if it will increase the overall price of fuel.

“Considering the tough economic times, it will be inconsiderate of us to approve an order that will see a hike in price of fuel,” said Chepkong’a.

The committee vice chair Robert Gichimu expressed similar sentiments noting that an increase in fuel prices will lead to a spike in food items and cost of living, which he noted is undesirable during these difficult times.

The key legal notice was endorsed after an assurance from the State Department of Roads led by Principal Secretary Joseph Mbugua.

PS Mbugua in response to the concerns of the Committee members assured them that the proposed hike in fuel levy will not increase the pump prices of petrol and Diesel.

“We are confirming to Kenyans that there will be no increase in price of fuel. We have measures in place to increase the levy without increasing the cost of fuel beyond the current prices,” he reassured.

The PS was accompanied by Director Generals Rashid Mohamed (Kenya Roads Board), Silas Kinoti (Kenya Urban Roads Authority), Ndung’u (Kenya National Highway Authority) and Philemon Kandie (Kenya Rural Roads Authority). 

According to the State Department, currently the Road Maintenance Levy Fund collection rate stands at Sh18 per litre of both Petrol and Diesel.

The collected amount has stagnanted at Sh80 billion per year since 2016, an amount that is inadequate to rehabilitate the country’s roads.

He explained that the retail price of petroleum products is regulated by the state, with the price control mechanism being based on import price.

“Despite the fact that the road network has grown in length from 161,451 Kms in 2016 to 239,122 in 2024, and economic times have changed, the amount of road maintenance levy has not changed. That’s why we are seeking a revision of the levy upwards,” PS Mbugua said.

Various stakeholders had raised uproar over the move to increase the road fuel levy by Sh 7 saying the move is a breach of constitutional principles and it will lead to high cost of living.

Previously, the Ministry of Transport had said it aims to generate over Sh115 billion by June next year from the increased RML to support the maintenance of the country’s road network.

It argues that RML has remained at Sh18 per litre since 2016, despite economic changes such as exchange rate fluctuations and inflation. With the new rate, the Board anticipates annual collections to rise from Sh80 billion to Sh115 billion.

According to the ministry, the inflationary environment and the Kenyan shilling’s value depreciation to the dollar, continued to impact construction materials used in road works, the majority being imported. By Irene Mwangi, Capital News