Revealed: Tax evasion scheme costing Kenya millions of shillings daily at Namanga border
The country is losing millions of shillings daily in a tax evasion scheme between Kenya Revenue Authority (KRA) employees and crafty importers.
Importers and KRA officials at the Namanga border are now using fake import declaration forms to fraudulently allow trucks from Tanzania into the country without paying the required tax.
Importers are now avoiding the Mombasa port and instead using the port of Dar es Salaam then Namanga border before making their entry into Kenya.
The choice of Namanga border is seen quite strategic as it is not fortified with hi-tech detection system able to tell what is contained in a container. Namanga only has a scanner and with compromised KRA staffers, some trucks show up at the border post and log the wrong cargo in the import declaration form for the compromised KRA workers to clear the goods without proper verification.
Other than mis-declaration, the schemers have also been using single entry invoices to register multiple entries. For instance between October 4th and 5th, 20 trucks bringing in LPG gas went through the Namanga border into Kenya but with connivance of KRA officials 6 trucks could not be accounted for, bleeding the country over Ksh.6 million in tax
To make the system foolproof, KRA requires that upon arrival at the port, an entry of the consignment is made and in case of petroleum products, a customs oil stocks information system (COSIS) is entered for easy tracking in taxation. After verification, the cargo is not released until an exit note has been filed.
At the Namanga border, these procedures are openly flouted and with the COSIS system missing, traders will produce Tanzanian entry reports and if not, the Kenyan side will produce fake import declaration forms under declaring what is contained in the cargo. Ironically after verification, the consignment will be released even before an exit note has been entered making it difficult to intercept the trucks.
On October 1st, two trucks went through the Namanga border, the importer being pine energy getting their LPG gas from Mozambique. Interestingly only one truck is recorded to have gone through the scanner at the border despite inspection showing two trucks passed through the Namanga border.
Still at the Namanga border, on October 3 this year, two trucks from Tanzania used the same entry number into the country.
With a total of 17 trucks at the border a whopping 11 trucks were cleared without going through KRA scanning machines — this costing the country millions of shillings in tax losses.
On 4th of October, with a total of 11 trucks ferrying LPG gas crossing the Namanga border, systems at KRA headquarters indicate 6 trucks cannot be accounted for as they mysteriously vanished from the system.
This is only a reflection of the rot at the Namanga border with Times Tower now calling for investigation of the KRA Namanga border team for ignoring the mandate to scan every consignment at border points fitted with scanning machines.