KRA set to destroy seized luxury cars and goods in tax crackdown

Officers from a multi-agency team including Kenya Revenue Authority inspect a high-end vehicle inside a freight container during a crackdown at the Port of Mombasa. [File, Standard]

Kenya Revenue Authority (KRA) plans to destroy dozens of high-end vehicles and dispose of other confiscated luxury items from traders and importers who have failed to pay taxes.

The goods were seized at different entry points, and KRA says it will either auction them off or destroy them if the owners do not pay the required taxes within 30 days.

The decision to destroy the goods – one of the largest seizures by the taxman - may draw attention to KRA once again, especially since authorities have vowed to stop aggressively pursuing tax evaders. KRA said that under sections 42 and 248 of the East African Community Customs Management Act, 2004, the condemned goods will be considered abandoned and will be destroyed or disposed of in a manner directed by the Commissioner within 30 days of the notice.

“Notice is given that the under-mentioned goods which have been condemned shall within 30 days of this notice be treated as abandoned and will be disposed of by destruction or otherwise disposed of in such manner as Commissioner may direct,” said KRA in a notice published in the Kenya Gazette.

A separate announcement in the dailies listed additional goods that would be sold put under the hammer. In the earlier notice, KRA listed several high-end vehicle models, such as Mercedes Benz, Range Rover, and Volvo that it may dispose of or destroy as it deems fit. Various other items include books, premium beers, spare parts, medical devices, and sanitary pads.

The announcement comes as KRA intensifies its efforts to enforce customs tax compliance at key entry points, including the Jomo Kenyatta International Airport and the Port of Mombasa.

Failure to declare and pay duties on expensive goods exceeding the duty-free limit may result in surrendering the items to KRA, penalties, or even arrest upon arrival. Recently,

KRA faced a dilemma after it intensified its crackdown on luxury shoppers and traders in an attempt to generate additional tax revenue.

However, the new measures were met with criticism from tourism lobbies and parliament, including Departmental Committee on Defence, and Foreign Relations Chairman Nelson Koech.

Mr Koech expressed his disapproval of KRA’s Passenger Terminal Guidelines, stating that it was not the right time to threaten those coming to Kenya and urged government agencies to be sensitive in their public announcements.

KRA had warned that severe penalties, including arrest and prosecution, would be imposed on individuals found to be mis-declaring the quantity, description, or value of dutiable goods.

The crackdown was implemented due to the tendency of travellers to bring in high-end luxuries without paying taxes.

At the port of entry, travellers are required to pay customs duty for goods that are subject to taxation. Additionally, imported goods may be subjected to value-added tax and excise duty if they exceed the allowable limits.

For travellers, there are specific limits on the number of spirits, wine, perfume, cigarettes, cigars, tobacco, and snuff that can be brought.

According to the law, KRA customs officers have the authority to inspect the luggage of passengers and conduct body searches if they consider it necessary.

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

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