The Rwanda Revenue Authority (RRA) has become the third East African region country to commission the regional Electronic Cargo Tracking System (RECTS). After similar events in the recent past in Nairobi and Kampala, this completes the geo-fencing of the route from Mombasa to Kigali. The Independent talked to Richard Tusabe, the Commissioner General, RRA, about the new system. Below are excerpts:
Tell us about the recently commissioned Electronic Cargo Tracking System (RECTS). What is this facility about?
The Electronic Cargo Tracking System is a new facility that is going to; first of all, give the actors in the supply chain namely insurance companies, transporters, importers and exporters, border communities, a chance to track cargo across the (regional) corridors to see where their merchandise or cargo consignments have reached.
What value does this facility add to businesses?
By providing visibility to the consignment, the RECTS gives the business community confidence of where the driver has reached with their cargo that is en route to Rwanda or heading to the respective ports of Mombasa and Dar-es-Salaam.
So we believe that it’s going to reduce the cost of premiums to the traders, it’s going to increase time to trade because if you’ve only been doing three or four rounds because maybe the driver has decided to sleep at one of the border points, you’ll have a chance to say, “Hey! Please proceed to Kigali. I am waiting for you to get those goods to the merchant that is here.”
For other actors like insurance companies, because most of this cargo is insured, its visibility allows them to see that there are no malpractices or to spot people who have been abusing their insurance covers.
Those are just some of the benefits that we envisage in terms of improving time, reducing cost and definitely as you do that you are improving competitiveness not just for the respective countries within the East African Community, but for the entire region as well.
What are the rewards to the tax administrations?
The rewards for tax administration are enormous. In the past, we’ve seen a lack of trust and confidence in the supply chain regarding what comes into, and gets out of, our respective countries within the region. This has caused the tax administrations to work in a very manual approach whereby they have been trying to physically verify each and every consignment.
However, that has not stopped dumping, where cargo is offloaded in a jurisdiction or in a country in which it was not supposed to be offloaded, under the pretext that it is actually still proceeding to its country of destination.
Therefore, from a tax administration perspective, we are going to see improved revenues because the revenue leakage is going to be mitigated. Also, it’s going to allow us give more confidence to the business community to trade with ease without the manual processes that we’ve been applying to avoid revenue leakage within the supply chain.
How can the ordinary citizen expect to benefit from this project?
I think the ordinary people will benefit in the sense that because we’ve reduced the cost of doing business, the final price to the consumer is likely to come down.
In addition, there’s another big component from the health perspective, where some goods could in the past get manipulated or contaminated along the way, hence compromising the standards of these goods.
With this system, we shall be able to see and track what goods are coming from the port, whether it is cooking oil headed to the markets, or fuel that’s coming to our depots, thus minimizing the risk of these products being contaminated, hence protecting the consumers, the environment and other beneficiaries across the chain.
How does this push the integration agenda to another level?
I strongly believe that it is going to enhance the integration agenda of the EAC.
When you see how this initiative came up, it was under the Northern corridor initiative with the three heads of state asking, “How can we improve trade? How can we improve transparency, predictability and certainty within the clearance process?”, and RECTS was selected as one tool that can be leveraged on to achieve these aims.
So how does it speak to the integration agenda? One, it’s a shared vision at regional level. Integration is partly about the people having common processes and procedures, sharing the same investments, and benefitting from economies of scale where investments cost less compared to what they would were each country to put up this platform alone.
Two, we are leveraging a shared infrastructure to provide visibility across the corridor, so our respective citizens have the chance to use the system in their respective countries.
Any message to the stakeholders?
This is a shared, mutual-benefit investment for the business community, for the government, civil society and all other stakeholders. So I call upon every one, particularly the business community, to embrace the platform, and ensure that the uptake is really high because only by doing that can we fully realize the benefits it envisages.