Relief as KRA eases tax evasion crackdown on luxury shoppers

President William Ruto (right) during the KRA National Taxpayer’s Day in Mombasa on Friday. [PCS]

Travellers say the Kenya Revenue Authority (KRA) has relaxed its aggressive enforcement of customs tax compliance at the Jomo Kenyatta International Airport (JKIA).

This comes amidst a nationwide outcry and the plea from prominent government figures, including President William Ruto, on Friday, urging tax authorities to refrain from causing distress to travellers.

Regular travellers who were interviewed by The Standard Saturday reported that they had come across friendly customs officials.

During the KRA National Taxpayer’s Day in Mombasa on Friday, President Ruto emphasised that the days of an oppressive agency using excessive and oppressive abuse of statutory authority to intimidate taxpayers in the pursuit of revenue collection “are now a thing of the past.”

“KRA must, therefore, continuously demonstrate a singular commitment to new service-oriented values and signal a departure from the abuses and excesses of previous times, which only served to elicit resentment and encourage evasion while facilitating wastage, theft, embezzlement and other corrupt practices,” said President Ruto.

Speaking at the same forum, National Treasury Cabinet Secretary Njuguna Ndung’u said KRA should not harass visitors in the name of enforcement.

“I... wish to assure our visitors and all travellers to this country that no new taxes have been introduced and that the process at our entry points is smooth and diplomatic and the Customs Officers of KRA have been instructed to ensure this process remains seamless and should not mishandle our visitors and travellers,” said Prof Ndung’u.

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

The move was seen as a further tightening of the noose on luxury shoppers by KRA as it faces mounting pressure to generate additional tax revenue.

But Tourism lobbies and the Chairperson Departmental Committee on Defence Intelligence and Foreign Relations Nelson Koech had condemned the new KRA guidelines.

“The KRA’s Passenger Terminal Guidelines could not have come at a worse time. This is not the time to be threatening those coming to Kenya,” said Mr Koech.

“We agree, the laws around the world impose limitations on the amount of good but that should not be an excuse to threaten passengers, harass travellers or infringe on the privacy of tourists.”

KRA had said it plans to strengthen its enforcement efforts at ports of entry such as the 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 this week reported encountering heightened scrutiny from customs officials regarding the contents of their luggage upon their return from overseas, after the implementation of the crackdown.

“There appear to be mischievous characters at Times Tower who are bent on sustaining negative publicity on taxes. We appreciate that the only way we are going to achieve sustainable development as a country is by paying taxes and becoming dependent on our own resources as a country,” Mr Koech had said.

“But even then, there is a need for all agencies of government to go easy on Kenyans and as far as possible avoiding coming across as insensitive in making their public announcements.”

Dutiable goods

KRA had earlier warned 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.

Travellers often bring in 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 a 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, had 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.

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