Taxman losing billions as cartels infiltrate vehicle listing system

KRA Commissioner General John Njiraini (right) and NTSA Director General Francis Meja during a press briefing at Times Tower, Nairobi, yesterday. The taxman admits cartels have invaded vehicle registration in what is costing the country billions of shillings in revenue loss. (PHOTO: BONIFACE OKENDO/ STANDARD)

The taxman admits cartels have invaded vehicle registration in what is costing the country billions of shillings in revenue loss.

However, the Kenya Revenue Authority (KRA) said it requires more time to deal with the big vehicle registration mess that is deeply rooted.

“It is a large country with many vehicles and we can’t say there is guarantee that we are going to have this problem resolved in one month. It could take two months or more. There are no quick fixes in fraud cases,” explained KRA Commissioner General John Njiraini.

According to Njiraini, the process of securing systems and nabbing the forces behind the black business that has denied KRA billions of shillings will take long.

Njiraini said fraudsters are using many means, such as interfering with the systems, faking log books and using number plates of vehicles that have been written off.

“Criminals and fraudsters do not go to sleep because you have closed one loophole. Even as we close this, they are thinking about the next one,” explained Njiraini.

National Transport and Safety Authority (NTSA Director General Francis Meja told journalists the body hopes to acquire more secure log books to “avoid this situation where people are manufacturing and counterfeiting this critical document.”

In May, KRA impounded several top-of-the-range cars that had escaped duty and even lacked requisite importation documents. The crackdown that targeted car selling bazaars saw the taxman publish details of 124 cars whose owners were asked to present them for verification.

Njiraini admitted the process has not been successful, with just 12 of the 124 cars that the taxman believed had been improperly imported and registered presented to KRA.

“We have not achieved the success that we had expected in terms of the vehicles being brought back. Further steps will be taken such as deregistration of those vehicles by NTSA so that they cease to be recognised,’ said Njiraini.

The process has also run into headwinds of legal battles. The Commissioner General said  KRA had been sued by some of the affected owners. The case is ongoing with the next hearing  set for August 4. In the meantime, the court has put an injunction on KRA.
Meanwhile, NTSA, which has been collaborating with KRA in this process, is moving to secure its database, modernise registration process and secure the number-plating exercise. But this will take longer.

“Currently, we are doing motor vehicle registration with a very old system that is prone to a lot of manipulation. For the last two years, we have been working on a new system called Transport Integrated Management System,” said Meja.

The system has a vehicle registration module, which NTSA has already piloted with about 25,000 vehicles and hopes to roll it out fully to cover all vehicles.

According to Meja, this system is more secure since it has been integrated with the customs systems to allow flow of information from KRA system to NTSA system without any human intervention.

“We know that our number plates have been used since independence. Obviously, it is very easy to counterfeit and there is an attempt to secure more secure number plates,” he added.

The tendering for the new generation plates happened last year but has also stalled after its award was challenged in court. In the meantime, NTSA has procured a unique technology called third identifier, which will be permanently fixed on the wind shield of every vehicle.

This unique identifier will have all details of the vehicle, allowing for electronic confirmation of such details as opposed to physical verification.