KRA unearths Sh100mn tax evasion scam at Mombasa port

The Kenya Revenue Authority (KRA) has unearthed a tax evasion scam at the Mombasa port involving fraudulent clearance of cargo that has cost the taxman over Sh100 million in revenue losses.

Commissioner-General John Njiraini said the scheme was discovered when customs officials were reconciling containers meant for auction.

“Initial findings indicate that 104 containers were un-procedurally removed between June and July 2016. The total number of containers cleared by customs for the two months was 40,924 implying that 99.99 per cent of cargo was cleared procedurally,” he said in a statement on Wednesday.

“Preliminary findings point to collusion between various players including importers and clearing agents, transport service providers, Kenya Ports Authority (KPA) and KRA staff in cargo clearance,” he added.

Mr Njiraini said while KRA and KPA staff involved in the clearance of the cargo had been suspended, clearing agents and transporters who handled the cargo have been apprehended.

“Operations are also in progress to impound all the 29 trucks identified to have ferried the cargo out of the port,” he added.

The scheme came to light during a recent audit meant to ensure proper accountability for container stocks at the port and facilitate identification of overstayed containers.

'SOPHISTICATED CARTEL'

It not clear how long cartels have been clearing cargo in this manner, since the KRA started auctioning overstayed containers in June this year after nearly a year.

In February, the KRA announced a 60-day amnesty for importers to clear overstayed cargo that was imported before November 2014.

By the time the amnesty expired on May 12, only 16 containers and 98 vehicles had been cleared, with a balance of 1,046 vehicles and 1,159 containers, according to statistics released by the KRA.

Only last week, cocaine worth Sh360 million was seized at the port, concealed in bags of sugar imported from Brazil and heading to Uganda.

The KRA’s revelation also comes two weeks after police claimed there were tax evasion cartels involving KPA and KRA officials.

Coast Regional Coordinator Nelson Marwa said the syndicate was still at work at the data processing centre at the port.

He said investigations by a multi-agency security team established that the individuals jammed the KRA Simba online system to mis-declare goods passing through the facility.

“This is a sophisticated cartel where the individuals bring in expensive goods but declare it as just small cargo,” he said, adding that once tampered with, the system read an “error”, pointing at insiders at the port.