Laws to tighten-up for bonded warehouses

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The Ethiopian Revenues and Customs Authority completed a study to improve problems related to bonded customs warehouses. The research which categorized the legal and practical problems in relation to bonded warehouses is expected to be used to change regulations.
The research discovered that bonded warehouses located in the industrial parks have many illegal activities occurring in them. Industrial parks, including the factories, are considered bonded warehouses and they are subjected to close supervision.
The research suggests that in a 700sqm compound the warehouse must be a minimum of 50sqm. The person authorized to administer the warehouse was sometimes discovered to be replaced with other people without the authority’s knowledge.
The study also recommended the materials in the warehouse and the building be insured and lifted the need to ensure the tax and customs duty. Currently there is no specified statement for what the insurance company’s responsibility is.
The research also specified that the amendment of the regulation should consider the location of the warehouses only on the logistics route of the country.
The team which found warehouses in residential areas which they said created a risk to society. It recommended the location to be in the outskirt of Addis and other areas in the import corridor.
Previously the issue of the warehouse used to be handled in the branch offices. It was before few months that the mandate was returned to the headquarters. After the change in the mandate the authority tried to tighten the controlling methods.
Bonded warehouses are used to store items with custom duty and tax for a maximum of four months. The taxpayer will get an additional two months if they store the item in their warehouse. The duties and taxes can be paid when the item is sold. The scheme is implemented to encourage the business community have enough time to search for a market after the accession of the item. If the item was stored in the government stores the maximum time limit will be two months.
Problems traced by the research in relation to the time limit say there is no specific provision when the exact time that items need to be taken out of the warehouse after they are sold.  Some are seen holding items in the warehouse after they sell it just not to pay the payments until the time lapses.
Infrastructure which is expected to be fulfilled is observed by the research to be below standards. Warehouse without a shade was observed in the study. There was also a warehouse discovered without an asphalt or concrete floor.
Controversy between the administrative decisions and the laws need to be resolved, according to the study.
The authority which had 265 licensed warehouses last year, stopped 56 warehouses from renewing their license because of low standards and annual fee-related issues. Among the failed warehouse some were in industrial parks. Among the 16 warehouses in the Adama town, the Authority renewed only two.
“The research will be used to modify the existing regulation and directives,” Yoseph Shiferaw, customer service director told Capital.