KRA suspends officers in Sh100m tax evasion

An aerial view of the Kenya Ports Authority (KPA). Kenya Revenue Authority (KRA) has suspended KPA officers linked to aiding importers to clear cargo out of port without paying taxes. (PHOTO: GIDEON MAUNDU/ STANDARD)

Kenya Revenue Authority (KRA) has suspended officers linked to aiding importers to clear cargo out of port without paying taxes.

This follows revelation that 104 containers were unprocedurally cleared by Mombasa-based Customs staff between June and July this year. The containers are estimated to have denied the Government a tax revenue of about Sh100 million.

“Preliminary findings point to collusion between various players including importers and their clearing agents, transport service providers, Kenya Ports Authority (KPA) and KRA staff involved in cargo release operations,” said KRA in a statement yesterday.

According to KRA, clearing agents and transporters who handled the cargo have been identified, arrested and recorded statements. However, KRA is yet to impound 29 trucks that were used to get cargo out of the port even as investigations continue.

Even though KRA maintains that the containers are insignificant considering that 40,924 containers were correctly cleared during the two months period, it points to a possibility of a well-coordinated scheme to deny government taxes.

Verified by KRA

“The scheme came to light recently during a routine reconciliation exercise by customs staff, intended to ensure proper accountability for container stocks landed at the Port,” said KRA Commissioner General John Njiraini.

The taxman has said that together with KPA, it is addressing the identified weaknesses in the system that led to the fraud.

According to KRA standard operating procedure, all imported cargo is supposed to be stacked by KPA and verified by KRA officials and Kenya Bureau of Standards. Imports are only supposed to leave the port upon processing of relevant documents and payment of tax.

The latest incident of collusion between KRA officers and other workers at the Port comes hot on the heels of a similar one three months ago.

In mid-May, four KRA officials attached to Customs and Boarder Control department were also suspended for helping in clearance of nine containers even before the vessel conveying them had docked at the Port.

And in February, KRA nabbed a contraband consignment of 16 containers valued at Sh28 million. The containers were loaded with sugar branded as Kakira Sugar Company, a Ugandan-based sugar miller.

Also in December, three new range rover vehicles were cleared at the Port as baby seats, toys, beds and women’s belts to cost the country Sh19 million in import taxes. The taxman continues to battle with rising cases of tax evasion including another racket that is issuing fake number plates to deny the country revenue.