The taxman has ended the monopoly enjoyed by the Government Printer in supplying it with stationery after the press failed to provide enough documents for facilitating trade with Europe.
The Kenya Revenue Authority (KRA) said it had contracted another printer for the job although it still has a valid contract with the government agency.
“KRA decided to contract the services of an alternative reliable supplier. Currently we are in transition and we are following up the Government Printer to supply what is outstanding as we seek the services of an alternative supplier,” said KRA spokesman Keneddy Onyonyi.
The Government Printer, located opposite KRA’s Times Tower headquarters on Haile Selasie Avenue, could not be reached for comment as telephones at the facility were not answered.
The flower industry says Kenyan exports are under threat following months of the taxman’s failure to supply them with key documents facilitating duty free exports to the European market.
The Industry lobby, the Kenya Flower Council (KFC), has written to KRA demanding compensation for members who are losing business.
KFC says buyers are increasingly sourcing produce elsewhere which puts the long-term prospects of the industry in jeopardy. Apart from flower imports, Europe is one of Kenya’s most important trading partners, accounting for Sh108.7 billion, behind the East African Community’s Sh134.8 billion.
Euro 1 and GSP forms are required at the port of entry to facilitate exemption from punitive European taxes. Kenya and other African Caribbean and Pacific (ACP) countries have a long-running non-reciprocal preferential trade currently being renegotiated under the Economic Partnership Agreements (EPAs).
“Today I realised we cannot export flowers to some specific European destinations and on seeking an explanation from KRA, they said the Government Printer could not meet demand for the bulk of papers needed daily to facilitate the smooth export of flowers,” said Jane Ngige, the KFC chief executive, last weekend.
But KRA maintains that as long as it obtains the official document from the State printer exporters have to wait until it is able to source from the other printers.
KFC has complained about the shortage since 2010. Ms Ngige forecast the sector could lose as much as Sh4.5 billion on a monthly basis if the situation is not addressed.
She said while in the past importers and shipping agents had given Kenyan exporters temporary exemption in the belief that the situation was temporary, they are now shutting out Kenya goods.
Mr Onyonyi said exporters were worsening the situation by buying more than they required in anticipation of a shortage. That means those seeking to export immediately have no forms available.
“The truth is that this is inconveniencing to exporters but that is the situation we are in,” said Mr Onyonyi.
The forms are also a source of revenue to the KRA. Ms Ngige says the one-page form costs Sh500, meaning KRA may lose millions through failure to supply the documents.
“If Kenya cannot supply the flowers, the buyers will be forced to source the product from elsewhere thereby denying the government a lot of revenue besides putting the livelihoods of more than two million people depending on the sector on the line,” she says.
The KFC complaint comes days after motor vehicle dealers complained of lack of number plates, a situation that forced KRA to allow cars into the market before they are affixed with the plates.