3 businessmen sought by DCI over tax evasion racket at JKIA

Sunday, May 17th, 2020 18:00 |
Rolling Cargo. Photo/Courtesy

Hillary Mageka @hillarymageka

Detectives have launched investigations into reports of under-declaration and failure to declare the value of imported goods by unscrupulous businessmen in a bid to evade tax said to be amounting to billions of shillings.

Investigations have also revealed that other businessmen import goods claiming they are on transit to Uganda and South Sudan but end up selling them within the country and evade paying tax.

Detectives from the Directorate of Criminal Investigations (DCI) and Kenya Revenue Authority (KRA) officials are currently investigating at least three businessmen in connection to the tax evasion racket.

In a supporting affidavit filed by a DCI investigator seen by the People Daily, detectives seek to investigate the activities of the Rolling Cargo Company’s director Mohamed Abdi Gulet and the firm clearing agent Mohammed Busaidy.

Another man of interest is Mohammed Hussein, a businessman based along Lithuli Avenue.

On Friday, detectives made an impromptu visit to the firm’s African Cargo Facility at the Jomo Kenyatta International Airport (JKIA), where they found consignment of electronic goods mainly mobile phones that had just been imported.

“The shipment of consolidated cargo is believed to have been smuggled to evade levies due to the government, with some being contraband,” a detective involved in the probe said.

They included two waybills numbers 155-02845312 and 155-02545443.

The former waybill was delivered to its warehouse at JKIA, indicated the consignment had 833 pieces of boxes but did not indicate its weight or state the product name.

Waybills numbers.

“This was to help them evade taxes,” the police source noted.

On the other hand, air waybill no 155-02545443 destined for Kampala, Uganda but indicated Nairobi had 832 pieces of boxes did not also indicate its weight or state the product name.

The firm has been receiving large consignments of goods but is alleged to be splitting shipments leaving at least 20 percent for verification by authorities as they smuggle the rest.

According to police sources, the method involves assembling small shipments into a large container for delivery.

“Commonly seen in international export, it involves packaging, or bundling, multiple small shipments into one large shipment for distribution to the same end location,” a senior DCI detective involved in the investigation said.

Instead of individual business, paying substantial shipping costs, Rolling Cargo Company Limited mischievously opts cargo consolidation (sometimes also called freight consolidation) which allows relaxed shipping speeds, putting items from multiple shippers into one shared shipping packaging)

Asked about the allegations, Mohamed Abdi Gulet, Rolling Cargo Company’s director was however cagey and only attributed the current probe to business rivalry.

“As you know we are clearing agents based at the JKIA. I can assure you this is a business rivalry between us and do not want to comment on it please,” he told People Daily.

“We believe in due process but our competitors believe in shortcuts,” the businessman said.

Rogue state officials have been accused of colluding with unscrupulous traders to facilitate false declarations, denying the Kenya Revenue Authority (KRA) requisite taxes, such as import duty, a move said to have led to a loss of over sh100 billion in the recent past.

They are also said to allow in counterfeits into the market and through the transit route into the hinterland in exchange for fat weekly bribes that run as high as Sh52 million a week.

Preliminary investigations have revealed the criminal scheme has been in existence for years is driven by a well-organized machinery that has occasioned a reduction in tax collection by KRA.

The taxman has consistently missed its targets due to tax-related misconduct such as theft, cheating in the declaration of return, corruption, collusion and soliciting bribes from tax cheats.

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