Two directives from President William Ruto and his deputy, Rigathi Gachagua, have left the taxman’s hands tied in the war against counterfeits and tax evasion.
Senior Kenya Revenue Authority (KRA) officials told People Daily that the agency is no longer pursuing new cases of tax cheats and dealers in counterfeits as they await clear directions from the Executive.
“There are no new cases of tax evasion being registered at the moment,” said one source who requested anonymity due to the sensitivity of the matter. “We’ve decided to go slow on crackdown against unscrupulous businesses and our enforcement team no longer conducts any crackdowns.”
The slow down has created opportunities for dealers in counterfeit and contraband products. For instance, in Nairobi’s Nyamakima, Kariobangi and industrial area, commodities like a 13-kg container of cooking gas is being sold at Sh2,080, about 30 per cent cheaper compared to between Sh3,000 and Sh3,400 for the same container in the open market.
At Nyamakima, a spot check established that a packet of 10 pairs of AA20 size (R6) Eveready batteries was retailing at Sh400. Ordinarily, the same pack should cost about Sh1,000.
These discrepancies in prices indicated that the dealers are not paying tax for the goods, meaning that KRA is losing out.
Last March, the taxman disclosed that between 2017 and early 2022, it intercepted 5,034 cases of illicit trade and tax evasions. It also took various interventions, including penalising offenders, prosecuting others and destroying seized contraband.
High value products such as alcohol, ethanol, cigarettes, petroleum products, motorcycle and motor vehicle parts top the list of the most smuggled goods that KRA has seized in the recent past.