KRA targets luxury shoppers in tougher tax evasion crackdown

A KRA Officer and a sniffer dog inspect luggage at the JKIA, Nairobi. [Cyrus Ombati, Standard]

The taxman has warned that travellers and luxury shoppers who fail to declare and pay duties on expensive goods that exceed the duty-free limit will lose their items to authorities, face significant penalties or even be arrested upon arrival.

The move is seen as a further tightening of the noose on luxury shoppers by Kenya Revenue Authority (KRA) as it faces mounting pressure to generate additional tax revenue.

KRA said it plans to strengthen its enforcement efforts at ports of entry such as Jomo Kenyatta International Airport (JKIA), targeting both Kenyan citizens and foreign visitors to ensure compliance with customs regulations.

Regular travellers who spoke to The Standard on Tuesday reported encountering heightened scrutiny from customs officials regarding the contents of their luggage upon their return from overseas, after the implementation of the crackdown.

KRA stated that individuals who are discovered walking through the gates with dutiable or prohibited goods, or who are found to be mis-declaring the quantity, description or value of dutiable goods, will be subject to severe penalties, including arrest and prosecution.

Additionally, depending on the seriousness of the violation, the offending goods may be seized.

“Any passenger found walking through the Green Channel with dutiable or prohibited goods, or found mis-declaring the quantity, description or value of dutiable goods at the Red Channel (the baggage is examined where misdeclaration is suspected), is liable to strict penal action including arrest and prosecution - apart from seizure of the offending goods depending upon the gravity of violation detected,” said KRA.

Kenyan travellers often bring high-end luxuries such as premium liquors, perfumes, bags, and cosmetics without paying taxes.

Customs duty is paid at the port of entry for goods subject to taxation, and imported goods may be subject to import duty, value-added tax and excise duty if the allowable limits are exceeded.

Travellers are permitted to bring spirits not exceeding one litre, wine not exceeding two litres, perfume not exceeding half litre, and cigarettes, cigars, tobacco, and snuff not exceeding 250 grammes in weight.

According to tax experts, the regulations governing the importation of such products are not new, but KRA is aiming to increase tax revenue.

Nikhil Hira, a tax expert and business partner at Kody Africa LLP, said KRA is focusing on collecting additional taxes from individuals who bring in goods upon their return from overseas. “This has always been there,” he said.

“(They are targeting) additional tax from people who bring in things when they come back from abroad.”

KRA customs officers are allowed by law to inspect the luggage of passengers and perform body searches if deemed necessary.

Nevertheless, diplomats and other privileged individuals are exempted from such inspections and searches.