KRA widens port probe to stem tax leakage

Monday February 1 2016

Containers at the port of Mombasa on July 4, 2015. Importers have protested the closure of Autoports Freight Terminals Limited and Portside Freight Terminals saying it was unprocedural. PHOTO | KEVIN ODIT | NATION MEDIA GROUP

Containers at the port of Mombasa on July 4, 2015. PHOTO | KEVIN ODIT | NATION MEDIA GROUP 

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Kenya Revenue Authority (KRA) has launched investigations into operations of Container Freight Stations to stem tax evasion.

KRA Commissioner General John Njiraini stated that the ongoing investigations are part of a wider campaign to enforce customs regulations and seal revenue leakages.

The announcement comes after KRA confiscated 40 containers of contraband goods at Compact Freight Systems in Miritini Mombasa, last week. 

Freight stations such as Portside and Autoport were also closed for smuggling in multi-million shillings worth of goods.

“Further actions will be taken in respect of CFS installations found to be in breach by engaging in transit diversion, smuggling and other fraudulent practices,” said Mr Njiaraini in a statement on Monday.

Mr Njiraini said lack of proper surveillance in the past has seen freight stations facilitate importation of contraband goods including sugar, rice, ethanol and other highly sought after commodities.

KRA has in the meantime suspended registration of new clearing and forwarding agents, threatened to withdraw more licences of errant CFS operators, as it conducts the re-vetting process to weed out malpractices in the industry.

The taxman hired James Wahome Kariuki, former head of operations at the Kenya Defence Forces, to head its border scrutiny operations. Mr Kariuki will help KRA in ongoing investigations by monitoring cargo and human movement to prevent tax leaks and tackle security threats.

In process, is the implementation of a new customs management system, which has superior features that will aid better practices in risk management, security targeting and valuation of cargo.