Custom bonds are a guarantee required by revenue authorities that goods will exit the country as required and will not be consumed in transit countries to avoid taxes. These bonds are a heavy additional cost to the trader. A TMEA commissioned impact assessment demonstrated that switching from national bond schemes to ASSET could have saved $209,000,000 in Kenya alone in the year 2011.
ASSET is an innovative system to eliminate the need for customs bonds, thus reducing the cost of doing business for traders and clearing agents, while safeguarding revenue. Through ASSET, taxes and duties payable at the country of destination are held in a dedicated financial facility before transit. This amount serves as the guarantee to revenue authorities in transit countries and as the duties and taxes payable upon safe arrival of goods at the intended destination.
TMEA is funding revenue authorities to conduct further research into the feasibility of ASSET and to develop the ICT infrastructure between the financial institutions and revenue authorities. The project supports Burundi and Tanzania revenue authorities to conduct a pilot on the Central Corridor for Burundi’s petroleum imports, through the port of Dar es Salaam.
Alban Odhiambo: firstname.lastname@example.org
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ASSET will save traders money spent on collateral and insuring bonds,, decrease the number of goods dumped in transit countries due to costly customs requirements, increase capital flow for the financial institutions involved, and decrease administrative costs for revenue authorities. This will help reduce trade costs in East Africa while safeguarding revenue.