KRA Corruption: Some workers at the Kenya Revenue Authority (KRA) have been revealed to be taking home up to Sh. 500,000 in daily bribes.
Revelations have also emerged on how KRA staff earning salaries of about Sh. 70,000 to Sh. 100,000 are living lifestyles that are worth tens of millions of money courtesy of the corruption network that is run at the revenue authority.
For example, a report in the Sunday Nation has reported that this network “includes collusion to undervalue imports, fake export entries for manufacturing companies to assist in the dumping of export goods locally, leading to massive loss of value added tax and evasion of income tax. Manipulation of the iTax system to assist importers and wholesalers evade VAT was also rampant.”
last week, KRA interdicted over 75 employees over corruption. It claimed that the interdiction followed a series of graft practices. “The practices in question include facilitation of fraudulent clearance of cargo, fraudulent amendment of tax returns so as to help individuals evade taxes and the irregular issuance of tax compliance certificates,” KRA said.
Last year, a KRA manager known as Joseph Chege Gikonyo was accused by the anti-graft commission of living large on a meagre salary. According to the commission, it was not possible for a civil servant earning a monthly salary of Sh. 119, 000 to live like a king beyond his known sources of income, with Sh. 615 million in unexplained wealth. Among property EACC suspects was illegally acquired are two plots in Nyali, Mombasa, valued at Sh. 125 million, two parcels of land in Shanzu, Mombasa, valued at Sh. 26 million and a farm house in Kilifi town valued at Sh. 27 million.
The report in the Sunday Nation reveals how detectives joined KRA in a bid to unravel the lot that has been on-going at the authority.
“The detectives were mostly working as newly employed junior officers like clerks, IT experts and even interns to unearth the corruption web. At the heart of the endemic corruption is a well co-ordinated cartel that over time perfected and institutionalized ways of abetting tax evasion at a fee by rigging the system. It entailed officers from various departments operating in cahoots with brokers and clearing agents to facilitate tax evasion.
“This includes collusion to undervalue imports, fake export entries for manufacturing companies to assist in the dumping of export goods locally, leading to massive loss of value added tax and evasion of income tax,” a source who spoke in confidence said. “Manipulation of the iTax system to assist importers and wholesalers evade VAT was also rampant.” ” the Sunday Nation report says.
The port has also been highlighted as a major area of concern where rampant corruption is carried out. According to the Sunday Nation, this has included “the deliberate mis-declaration and under declaration of taxes to Customs officials, mainly at the country’s points of entry.”
Says the report on KRA corruption: “This was notorious at Kilindini harbour where a top of the range vehicle, say a Toyota Land Cruiser V8 would be declared as a Toyota Axio. It means if one could have paid, Sh. 2 million as import duty, he ended up paying as little as Sh. 200,000. Electronic items would be declared as agriculture input goods and therefore no taxes would be paid since the latter is duty free.”