Kenya: KRA finds tax evasion syndicate by alcohol sellers in 3 counties


The Kenya Revenue Authority (KRA) has unearthed a tax evasion syndicate involving sellers of various types of alcohol in Embu, Tharaka Nithi and Meru counties.

Unscrupulous businessmen use fake KRA excise stamps, evading taxes amounting to more than 100 million shillings each month in the region, said Mr. Mutembei Nyagah, the agency’s director of investigations .

On Tuesday, the KRA confiscated more than 2,000 cartons of assorted alcoholic beverages from Meru that bore fake stamps, in which the IRS lost 6 million shillings in customs duties and value added tax (VAT), a- he declared.

Mr. Nyagah said investigations revealed that there were around 20 trucks delivering the produce to the area each month that they suspected of engaging in such activities, resulting in the loss of 100 million shillings.

According to the officer, the practice is widespread in the region with a tendency where distributors who have stores in the big cities of these counties do not stock the products in their outlets. Instead, they hide them in landfills and residential areas, then move the products to stores in small quantities.

Behind-the-scenes investigations

“We have already arrested someone about this incident. There have been behind the scenes investigations and now we have launched an operation that will ensure that all these people are stopped and this illegal trade is eradicated because in addition to the fake stamps there is also the danger that the products are of inferior quality. , putting consumers at risk, ”he said.

Officers from the Kenya Bureau of Standards (Kebs) will also be involved to determine whether the goods met the required standards, he said.

“KRA is not going to stop to eradicate cartels and traders who do not want to pay tax. We are going to smoke them and, already, our efforts are bearing fruit because in the last quarter, excise revenues increased, boosted by these operations that we are carrying out across the country, ”added Mr. Nyagah.

Due to the high excise duties and VAT levied on alcoholic beverages, traders get away with huge sums of money by evading the tax.

He said detectives were trying to establish who was involved in making the fake stamps that may have been supplied by other cartels other than the makers of the products.

Recently, KRA Northern Region Coordinator Nicholas Kinoti noted that trading in substandard products and tax evasion in the region – especially alcoholic beverages – was rampant, saying the authority, in collaboration with other agencies, had developed ways to combat the cartels involved in illegal trade.

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