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In Summary

  • KRA officials say they are zeroing in on four clearing agencies who could as well have cost the government much more income and defrauded parastals

The taxman has slapped a number of top companies with Sh1.5 billion charge, even after duty was purportedly paid for imports.

Kenya Revenue Authority (KRA) officials said a number of the firms are paying up quietly after realising they might have been taken for a ride by fraudulent clearing agents.

The officials, who are not authorised to speak on the matter, said they have zeroed in on four clearing agents who dealt with the imports and reportedly billed the firms but failed to remit the money to KRA. Officials are still trying to fully unravel the extent of fraud perpetrated by the quartet.

Using agents

The revelation coming soon after the taxman put a statement in the print media warning against using agents to pay customs duty is likely to send jitters through the fraternity of large importers.

Among the firms affected are two media houses and even parastatals the officials declined to name. KRA is bound by a confidentiality clause when dealing with clients.

“It is true we have written to them demanding payment. Some are paying quietly,” said an investigations department senior official. “We have always advised them to confirm with customs before they make any payment.”

There are two ways of obtaining containers fraudulently, at times with collusion with customs officials. One is declaring small parcels of high value content as containing goods of insignificant values - imported enzymes worth tens of millions are some of the items mis-declared as lowly goods like fertiliser samples.

Outright theft

Then there is outright theft of containers after manipulating KRA and Kenya Ports Authority online data.

Indeed, in the latter category, the taxman has been auditing entries from months back and has determined that 26 containers of goods were removed from the port of Mombasa while another 144 were illegally evacuated from Container Freight Stations.

Despite KRA blaming clearing agents for the fraud, the agents’ association when contacted said it was not aware of the said cases.

Pay taxes

Kenya International Freight and Warehousing Association national chairman Peter Mambembe said KRA was contradicting itself in view of the fact that agents were not supposed to pay taxes for clients.

“We have an MoU with KRA. They should tell us when such incidents happen,” he said. KRA, which is in the process of gazetting rules governing agents, says most of the fraud victims blame the authority for not reining in the agents but argues that even professional bodies like LSK and ICPAK have no control over the actions of their members.

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