Customs automated system, tax agency agility and efficiency of cross border trade in Nairobi inland container depot

Abstract

Multicarrier hand offs and border delays have been a challenge in logistics and supply chain, making it tough to track orders and determine liabilities for in-transit goods. Meeting promised delivery time frames has become a hurdle, impacting the efficiency of cross border trade. Additionally, paperwork, regulations and compliance, where, customs declaration, manifests, product license, packing requirements, export evidences and invoices used in the efficiency of cross border trade has involved significant documentation which varies in the market. The purpose of the study was to establish the moderating effect of Tax Agency Agility on the relationship between Customs Automated Systems and efficiency of cross border trade in Nairobi Inland Container Depot. The specific objectives were to determine the effect of Integrated Customs Management System, Electronic Cargo Tracking System and Scanning System on efficiency of cross border trade in Nairobi Inland Container Depot, and the moderating effect of Tax Agency Agility on each of the direct effect relationship. The study was anchored on three relevant theories which include; Diffusion of Innovation Theory, Technology Acceptance Model and the Dynamic Capabilities Theory. The target population for the study was 950 Customs Officers and licensed Clearing Agents. The study used Taro Yamane formula to arrive at a total of 281 respondents as a sample of the total population drawn from Nairobi Inland Container Depot. The study used explanatory research design and questionnaires were used to collect the primary data. A pilot study was carried out at Jomo Kenyatta International Airport. The data was analyzed using descriptive statistics and Multiple regression analysis to test the hypothesis at 0.05 significance level. The study findings indicated that Integrated Customs Management System execution had significant and positive effects on efficiency of cross border trade (β=0.155, p<0.05). Electronic Cargo Tracking System execution had significant and positive effects on efficiency of cross border trade (β=0.372, p< 0.05). and Scanning Systems execution had significant and positive effects on efficiency of cross border trade, (β=0.177, p<0.05). The study also shows that Tax Agency Agility has a moderating effect on the relationship between Integrated Customs Management System execution and efficiency of cross border trade (ΔR 2 =0.002, β=0.332, p<0.05). The study also showed that Tax Agency Agility moderates the relationship between Electronic Cargo Tracking System execution and efficiency of cross border trade (ΔR 2 =0.006, β=0.064, p <0.05). Lastly Tax Agency Agility moderates the relationship between Scanning Systems execution and efficiency of cross border trade (ΔR 2 =0.005, β=0.063, p<0.05). The study recommendation is that government should support the continuous development and integration of advanced Integrated Customs Management System technologies. The KRA is recommended to ensure thorough training for staff on the Integrated Customs Management System and regularly update the system to incorporate new features that enhance trade efficiency. The government should invest in infrastructure needed for comprehensive Electronic Cargo Tracking System coverage and reliability. Future studies may be conducted to investigate the influence stake holder sensitization on cross border trade.