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Kenya Revenue Authority (KRA) turns sights on car yards in sting operation

BUSINESS
By Moses Michira | May 17th 2016 | 3 min read
By Moses Michira | May 17th 2016
BUSINESS

Panic gripped used-car dealers in Nairobi yesterday as Kenya Revenue Authority (KRA) officials sought to smoke out tax cheats.

They launched a sting operation that was expected to seize cars that had been irregularly imported into the country, including those diverted while in transit to neighbouring countries.

The various teams dispatched mid-morning had not returned their respective findings regarding targeted vehicles, some feared to have been stolen from the United Kingdom, by the time of going to press.

However, in one instance that happened around noon at the Lavington Shopping Centre, a dealer frantically escaped KRA investigators, driving off in a white Toyota Land Cruiser without registration plates to an unknown hideout.

“We expect to find high-end cars that do not have the proper documentation as per our guidelines,” said the Commissioner of Investigations and Enforcement at KRA at the start the operation.

Irregular importation

The search followed Sunday’s directive issued to 124 car owners to surrender their vehicles to the revenue agency by 11 am this morning over irregular importation and undisclosed tax issues.

But as yesterday’s operation took off, it soon became clear that what was intended to be discreet may actually have been anticipated, possibly after an information leak.

In the incident that happened in Lavington, for example, a guard disclosed that the white vehicle had actually been driven out of one of the yards and hidden in a parking yard at a nearby petrol station.

Another driver picked the car about an hour later, after the KRA officials walked away, only to bump into them moments later and defy a stop order from the accompanying police officers.

In the other operations targeting other yards around the city, less than 10 vehicles were found to be without registration plates, which in itself is not a crime, as the sellers said they were at various stages of the registration process.

But the target of the operation was specifically vehicles diverted between the Port of Mombasa and the Malaba or Busia crossing points on the boundary with Uganda.

Entry restrictions into the other East African nations are more relaxed than in Kenya, where vehicles older than eight years are not allowed in. As such, cars across the border are much cheaper, providing an incentive to Kenyan dealers and eventual owners.

KRA’s Sunday recall notice was for sports utility vehicles and related luxury units, which the taxman described as having outstanding tax issues, and suspected to have initially been declared as transit cargo but later dumped in the local market.

Owners of the listed vehicles were required to present the vehicles, together with the original ownership, transfer and importation documents, to KRA’s investigations team at the Nairobi Railways Club for verification. Failure to do so “will lead to the impounding and issue of warrants of arrest for the respective units”.

KRA Commissioner General John Njiraini, however, sought to assure vehicle owners that the process would be undertaken humanely.

“We are conscious that some of these vehicles may have already been sold to innocent, unsuspecting customers, and we are asking them to co-operate with our officers in the ongoing investigations,” he said.

KRA suspects unscrupulous importers have not been paying customs taxes on many high-end luxury vehicle imports, and illegally selling them to unsuspecting customers at car bazaars.

At least 10 luxury vehicles have been seized at the Port of Mombasa misrepresented as household goods on transit to Uganda.

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