Motor vehicle importers, clearing agents arrested for tax evasion

The six who have been evading payment of duty through tariff misclassification and under valuation of motor vehicles were arraigned in Mombasa on Friday, October 4, 2019

MOMBASA, Kenya, October 4, 2019 – In its renewed war against tax crimes, Kenya Revenue Authority (KRA) has arrested six directors of Clearing and Forwarding firms for tax evasion.

The six who have been evading payment of duty through tariff misclassification and under valuation of motor vehicles were arraigned in Mombasa on Friday, October 4, 2019.

The suspects are directors of clearing agent companies-Evescon Global Logisticss Limited, Fleet Freighters Limited, Rank Network Logistics Limited, S and L Port Solutions Limited, Sahara International Logistics Limited and directors of second hand motor vehicle importation company Manjok International Limited.

The vehicles were declared using HS tariff code 8704.90.00, which attracts import duty at 10 per cent instead of 8704.2190 or 87043190 for diesel and petrol run vehicles respectively, which attract 25 per cent import duty.

In total, the second hand motor vehicle company Manjok International Limited had for the period 2016 to September, 2019, made a declaration of 87 vehicles under the wrong tariff code and in process evaded payment of KSh53,878,677 in taxes.

The suspects are directors of clearing agent companies-Evescon Global Logisticss Limited, Fleet Freighters Limited, Rank Network Logistics Limited, S and L Port Solutions Limited, Sahara International Logistics Limited and directors of second hand motor vehicle importation company Manjok International Limited.

The arrests followed lengthy investigations carried out by KRA’s Investigation and Enforcement Department, supported by the Revenue Protection Services (Directorate of Criminal Investigations).

During investigations, it emerged that despite the Commissioner of Customs and Border Control (C&BC) advising importers to pay duty directly to KRA, Manjok International had entrusted a broker -Mr. Dennis Bundi Muchira with their money to pay taxes due on their importations. On his part Mr Bundi would pay less taxes and submit fake documents to the importer to account for the money received from theimporters.

He is currently on the run and being sought by police.

KRA is committed to pursue those who fail to honour their tax obligations thus hampering the realization of Kenya’s Transformation Agenda. We call upon all importers to ensure that they pay import duty themselves to avoid cases where brokers take their money but fail to remit the correct taxes. This will support the KRA initiative of enhancing tax compliance in the country.

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