KRA losing billions in uncollected tax as imported footwear flood Kenya from Uganda

According to a well-placed source at the port of Mombasa most of the trendy shoes that have flooded the streets of Nairobi in the recent past came from Uganda, the country applies much lower taxes compared to Kenya

By Our Investigative Team

A syndicate of unscrupulous businesspeople based at the port of Mombasa are costing the Kenya Revenue Authority (KRA) billions of shillings in revenue by importing goods into the country then suddenly changing the port of destination once the goods land at the port, investigations have revealed.

According to a well-placed source at the port, most of the trendy shoes that have flooded the streets of Nairobi in the recent past came straight from Uganda, the country applies much lower taxes compared to Kenya. According to several traders in Mombasa and Kampala, import and excise duties equivalent paid in Kenya is as high as 50 % as compared to Uganda!

The new shoes are mainly imported from South East Asia and cost between Ksh. 500 to Ksh 2,500. Investigations further revealed that imported drugs and food supplements from China, India and South Korea which attract heavy VAT and Excise Duty have seen importers avoid high taxes by terming the cargo as “goods in transit.”

The Kenya National Chamber of Commerce and Industry has remained mum on cross border trade and imports at the port of Mombasa, as its President Richard Ngatia is busy with politics. Mr Ngatia is said to have shown an interest in becoming governor of Nairobi

The same cargo is later brought back into the country as a normal trade exchange which under the Comesa tariffs allow for free movement of locally produced goods and persons, which in this case are not. President Uhuru Kenyatta is said to have instructed KRA to expand the tax base ad reign in on defaulters but a well-connected clique is said to look the other way while pocketing hefty sums in bribes.

The Kenya National Chamber of Commerce and Industry has remained mum on cross border trade and imports at the port of Mombasa, as its President Richard Ngatia is busy with politics. Mr Ngatia is said to have shown an interest in becoming governor of Nairobi.

Local shoe manufacturers in Nairobi have reported poor sales during the festive season blaming hawkers selling imported wares on the street and pavements. Shopkeepers who pay taxes, rent, power and staff said they are facing hard times from hawkers.

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