Investigators are camping at the Kenya Revenue Authority to probe multi-billion shilling tax evasion racket and payment of kickbacks to allow contraband goods into the market.
Sources said all customs officials and officers manning ports of entry are targeted in the investigation authorised by the Directorate of Criminal Investigations (DCI).
The officers have been asked to declare their wealth in a lifestyle audit that has also been extended to their close relatives.
Sources said the DCI has been at the KRA offices for three weeks investigating a number of complaints, including stamps and clearance of illegal goods leading to tax evasion.
A similar probe is reportedly underway at Kenya Ports Authority.
As a pointer to the high-level investigation, the director, George Kinoti, personally led a team of detectives to the KRA headquarters for two consecutive days.
He then delegated the task to the Nairobi head of DCI, Nicholas Kamwende, who has been leading the investigations.
The officers have interviewed a number of customs officials, demanding documents of importation and those used in contracting printing of KRA stamps.
The primary function of the Customs Services Department - the largest of the four revenue departments - is to collect and account for import duty and VAT on imports.
Role of staff
“We will send the probe files to the Office of the Director of Public Prosecutions for action once our investigations are complete. It is a big racket exposing the country to danger,” said a source.
Apart from tax evasion, the detectives are also investigating the role staff at port of entries play in exposing Kenyans to harm through counterfeit goods.
Illegal sugar, milk, maize, electronic goods, vehicles, clothes, charcoal, wood and drugs are among the contraband sneaked into the country with the connivance of some customs officials.
Some of the sugar is intended for industrial purposes and had been labelled not fit for direct human consumption, but was being repackaged and sold to unsuspecting buyers.
The operation against counterfeits has also seized cooking oil and construction materials.
In July, the agencies were involved in the seizure of more than a million tonnes of contraband sugar in different parts of the country.
For the past two months, the Interior ministry has been playing a lead role in tightening security at the points of entry, including Mombasa Port, Moyale, Mandera, Wajir, Lamu, Busia, Namanga, Lunga Lunga and Isebania to seal loopholes.
Apart from the police, KRA officials have also been part of the crackdown on illegal businesses that lead to tax evasion.
But the latest investigation is prompted by reports that some officials in the agencies involved in the clearance of the goods were abetting the crimes.
The employees include those from Kenya Bureau of Standards (Kebs), KRA, Anti-Counterfeit Agency, Kenya Ports Authority, Kenya Airports Authority and police.
On Monday, KRA and DCI restated their joint commitment to deepen collaboration in combating tax evasion and corruption involving collusion between taxpayers and KRA staff.
“The collaboration focuses on varied aspects including the management of customs clearance operations and the tackling of illicit trade and both importation and local manufacturer level.
“In this regard, the DCI and KRA wish to announce the arraignment in court of three Kenya Ports Authority officials and one KRA official on charges of concealment and improper declaration of goods imported through the Port of Mombasa, contrary to section 202(a) of the East African Community Act 2004,” said a statement issued as the suspects took plea.
The suspects were charged with concealing imported goods worth over Sh6 million. According to the charge sheet, the accused on diverse dates between July 3 and August 4, 2018 concealed goods at a KPA shed at the Embakasi Inland Deport in Nairobi, intending to remove them without following prescribed processes.
Interior CS Fred Matiang’i last month told those manning major entry points to be accountable after increased seizure of contraband goods.