KRA unearths Well-Orchestrated Tax Evasion Scheme

Eighteen people have been arrested in Eastleigh within Nairobi City County in connection to a well-deliberated complex tax evasion scheme of ‘cargo dumping’ aimed at evading payment of taxes.

Kenya Revenue Authority (KRA) investigators, assisted by officers from the Directorate of Criminal Investigation (DCI), arrested the suspects following a three-day operation.

The arrest follows KRA’s unearthing of a well-orchestrated tax evasion scheme in which inland goods are misdeclared as transit goods with the intent to divert and dump the goods locally without payment of requisite taxes.

Investigations on the scheme revealed that truck drivers alter vehicle registration plates mid-journey within the country and tamper with the electronic seals which enable real-time monitoring of trucks transporting transit goods via the Regional Electronic Cargo Tracking System (RECTS) used by KRA’s Customs and Border Control.

The culprits in this scheme distort the truck’s identity to conceal the diversion of the goods and stay off the monitoring teams at the KRA’s Central Command & Control and Rapid Response Units (RRU) radar.

The trucks on transit are ‘armed’ with electronic seals which trigger an alarm at the KRA’s Central Command & Control if there’s tampering, diversion from the designated route, or an unusually long stopover and are supposed to be removed (‘disarmed’) at the borders as the transit goods exit the country.

In this case, a forty-foot container full with textiles (fabrics) loaded in Mombasa and declared as transit goods destined to Democratic Republic of Congo for a consignee named Kandama Kasongo Franchoise were diverted and offloaded in Eastleigh, Nairobi under the watch of DCI’s elite Operation Support Unit (OSU) and KRA’s Investigation & Enforcement officers.

During the intelligence-led covert operation, investigators watched as the truck driver- Meshack Leo, who is among the 18 suspects arrested, changed the truck’s registration at the Machakos Junction and tampered with the Customs electronic seal before proceeding with the journey towards Nairobi.

They were also seen erasing the “transit goods” marks on the trailer before making a u-turn in Mai Mahiu.

The enforcement teams had been trailing the truck from Mombasa for days and nights while waiting to strike at the right moment.This happened on Tuesday morning as the goods, worth Kshs.3,528,471.42 in taxes were being offloaded on Monday at around 2230 Hrs in Eastleigh.

Investigations further reveal that the consignee (Kandama Kasongo Franchoise) has over time imported and dumped a total of nine consignments with a tax implication of Kshs.21,956,664.81.