In a statement issued on Wednesday, November 4, the association directed transporters to immediately stop handling cargo that requires user-owned multi-vendor Regional Electronic Cargo Tracking System (RECTS) seals.
KTA argued that shifting the financial responsibility for mandatory customs cargo monitoring to transporters would increase their operating expenses and make the business environment difficult to sustain.
The association said it opposed KRA's decision to transfer the cost of customs cargo monitoring to transport companies, maintaining that the additional expenses should not be imposed without a clear arrangement for recovering the money.
As part of its directive, KTA instructed members not to purchase or lease electronic seals or enter into commercial agreements with seal providers until an acceptable cost-recovery arrangement is established.
The association also raised concerns that the new charges could weaken Kenya's competitiveness along the Northern Corridor, a major trade route serving landlocked countries in the East African region, including Uganda.
KTA warned that increased transportation expenses could affect businesses that depend on the corridor for the movement of goods, particularly those involved in cross-border trade.
The disagreement comes barely days after KRA introduced the upgraded electronic cargo tracking system on October 26, replacing the single-vendor arrangement that had operated since 2017.
KRA said the changes were designed to address problems experienced under the previous system, including shortages of electronic seals at cargo tagging points and frequent equipment failures caused by ageing devices.
Under the new arrangement, transporters and service providers can own and manage electronic seals based on their commercial agreements, allowing users to choose from multiple providers.
The tax authority expects the changes to increase the availability of seals, reduce queues at cargo handling points, minimise unnecessary tracking alerts and speed up customs clearance while maintaining cargo monitoring.
However, KTA maintains that the financial burden associated with the new arrangement remains unresolved.
The association has announced plans to seek urgent legal advice and is considering available legal options, including court proceedings, to challenge the requirements and protect the interests of transporters.
The suspension places the new cargo tracking arrangement at the centre of a growing disagreement between the tax authority and transport industry players, with the cost of compliance emerging as the main point of contention.
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