The crackdown on illegal mineral shipment is aimed at tax compliance and curbing capital flight by illegal shipment of minerals at Mombasa port.
Friday, 22nd September 2017 (Mombasa, Kenya)...The Cabinet Secretary for Mining has urged exporters of minerals and freight handling companies to comply with the requirements of the Mining Act and existing customs regulations that require all exports and imports to be based on valid export permits issued by the Ministry of Mining.
Kenya whose port of Mombasa is the gateway to East Africa and a major exit point for exports to the rest of the world has been cited as a key channel for the smuggling of illegally mined minerals from Kenya and neighbouring countries.
Speaking at the Port of Mombasa on Friday Mining Cabinet Secretary Hon. Dan Kazungu said, “Increased shipment of illegal minerals is costing the Kenyan government and indeed neighbouring countries revenues, meant to be generated through taxation and royalties”
Besides Kenya, some of the minerals are sourced from countries such as Tanzania, the Democratic Republic of Congo (DRC) and Central African Republic (CAR).
However, the rising incidences of illegal shipment of minerals are likely to dent the country’s international image. Under declaration of imports and exports of minerals has also been cited as another major challenge at entry and exit points that include border points, the port of Mombasa and the Jomo Kenyatta International Airport (JKIA).
“Some of the minerals being illegally shipped include gold, copper ore, gemstones such as rubies, tsavorites and diamonds among others. The Ministry of Mining is working with the Kenya Revenue Authority, security agencies and neighbouring countries to curb smuggling and illegal shipping of minerals”, added CS Kazungu.
Kenya has over the past two years undertaken major reforms in the sector including in the review of its mining fiscal regime to be in tandem the new Mining Act, 2016 and global best practice. According to a recent UNECA Report authored by the High Level Panel on Illicit Financial Flows from Africa and chaired by former President Thabo Mbeki, Africa loses $50 billion annually to illicit financial flows with the extractive sector accounting for 56.2% of the loss.