A multi-agency task force began implementing a presidential directive to audit the lifestyles of KRA managers.
SUNDAY MAY 22 2016
Some of the high end cars on sale at Valley Road Motors yard in Nairobi, on May 16, 2016, that Kenya Revenue Authority officials are investigating for possible import duty evasion. The country is being treated to the spectacle of customs agents chasing after the importers of luxury vehicles, some of whom are said to evade import tax. PHOTO | SALATON NJAU | NATION MEDIA GROUP
The lifestyle audit targeting 70 top managers at the Kenya Revenue Authority could miss an active network of junior staff largely responsible for heavy revenue haemorrhage at the country’s ports of entry.
The junior staff are said to work in cahoots with unscrupulous, well-connected dealers in import and export business, the Sunday Nation can report.
In the past three months alone, KRA has acted upon 12 junior staff members implicated in a tax evasion web that has cost the authority billions in revenue losses — money badly needed to fill a Sh69 billion target gulf.
Eight of them, mostly from the Customs department, have been arraigned in court since February as the taxman seeks to break the corruption syndicate.
A multi-agency task force began implementing a presidential directive to audit the lifestyles of KRA managers believed to have amassed wealth through corrupt practices.
The first batch of four KRA officials were arraigned at Milimani Law Courts, Nairobi, on February 18 on charges of abetting tax evasion.
Lilian Onyango, John Wesonga, Anthony Ochieng and David Mwongela — formerly attached to KRA’s Customs and Border Control Division in Mombasa — appeared before chief magistrate Daniel Ogembo on charges of making false Customs transit bonds, hence abetting tax evasion.
The four denied the charges and were released on a Sh1 million bond each, or cash bail of Sh200,000.
STAFF CHANGES
A week earlier, the taxman had put a brave face in defence of massive staff changes that had taken place at the agency affecting critical departments like investigations and enforcement, and human resources.
Commissioner-General John Njiraini said the changes were part of a broader government strategy to address weaknesses in the management of the Port of Mombasa and within the import supply chain.
“The changes undertaken do not in any way relate to integrity questions touching on the character of the individuals. In both cases, the changes were necessitated by the board’s wish to change course in order to meet the broader objectives of the government and the KRA as set out in the Sixth Corporate Plan,” Mr Njiraini said.
In under three months, four other staff members — Bernard Nyarige, Esther Nganda, Fredrick Njuki and Nicholas Ambala — have been arraigned at Milimani Court and charged with conspiracy to evade payment of duty, contrary to section 203 (e) of the East African Community Customs Management Act, 2004.
Two clearing agency officials were also charged alongside the KRA staff, with five unnamed clearing and forwarding firms being suspended from acting as Customs agents.
On Tuesday, the taxman suspended yet another four junior Customs officials who had allegedly plotted to un-procedurally clear nine containers from Kilindini Port.
In the insider racket, the staff released all containers in the system before the vessel conveying them had docked at the port.
Two of the containers had successfully been sneaked out while the other seven were intercepted for verification.
Customs and border control commissioner Julius Musyoki pledged to have the remaining two containers traced.
“It is no longer business as usual at our ports of entry. Any KRA official suspected of abetting tax evasion will face the full force of the law, alongside their accomplices who include unscrupulous traders importing cargo through the Port of Mombasa,” Mr Musyoki said.
HIGH-END CAR SWOOP
The latest swoop is on high-end cars suspected to have evaded tax.
Owners of these vehicles have expressed shock over the taxation queries, saying they were under the impression that the vehicles had been duly cleared.
Cabinet Secretary Eugene Wamalwa’s personal assistant Kizito Temba absolved the minister from blame, saying it was not his boss’ fault that one of his vehicles had been registered fraudulently without paying duty. He blamed KRA officials instead.
“The problem must be with KRA. There is an internal problem with their system. The problem is not with the buyers and they need to unearth it to stop this embarrassment to innocent vehicle owners,” Mr Temba said.
KRA commissioner Githii Mburu seemed to have pointed at the internal network as well, pledging action on any staff implicated in the syndicate by an ongoing investigation.
The lifestyle audit, which was to be overseen by Treasury and the KRA board, is yet to reveal any major finding six months after it was ordered, with indications that it has just begun.
Treasury Cabinet Secretary Henry Rotich deferred questions sent to him by the Sunday Nation on the KRA audit.
“The authority is progressing on this. Get the details from them,” Mr Rotich answered in an SMS.
Asked for details on the same, KRA board chairman Marsden Madoka declined to delve into the exact happenings, choosing instead to emphasise that “things were happening.”
“There are many things to look at and this is not something you do overnight, you know. There is no update for now but just know there is progress. Ok?”
Mr Madoka brushed aside further queries on the expected consequences of the audit and timelines.
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