Nairobi — The Kenya Revenue Authority could have lost millions of shillings after containers laden with goods were cleared from the Mombasa port without paying duty, the Nation learnt on Sunday.

Detectives from the tax collector have launched investigations to establish how the goods, in as many as 100 containers, were cleared from the port and two private Container Freight Stations (CFS).

KRA is said to have ordered the Kenya Ports Authority to stop releasing containers to one of the freight stations under investigation until it is cleared of any wrong-doing.

Licences of five clearing and forwarding companies are also said to have been suspended and their owners being sought for questioning.

According sources privy to the investigations, the racket involved releasing of goods that include textiles, garments and electronic goods worth millions of shillings without paying a single penny in import duty.

"What the fraudsters did was to pay port and shipping line fees before using import entries and receipts they had to clear new imports," a police official at Mombasa port said.

He said the racket is suspected to have been going on for sometime before it was unearthed by KRA.

"It is true we have launched investigations about fraudulent release of goods at the Mombasa port and so far recovered four containers," KRA's head of investigations and enforcement, Mr Joseph Nduati, said.

Fraudulently

Mr Nduati said it was still early for him to say the exact number of containers that had been released without payment of duty but added that he did not believe the number could be more than 100 as claimed.

"We are checking records and reconciling the data we are getting before we can establish the number of containers that were stolen," he said.

Mr Nduati also declined to say if they had arrested suspects and suspended licences of clearing and forwarding companies in connection with the tax racket.

However, a source close to the investigations told the Nation that by yesterday they had established that more than 80 containers had been fraudulently released.

He said KRA investigations were currently concentrated at the Mombasa port but more detectives were expected from Nairobi before the officers move into two of the implicated CFSs.

"Apart from clearing and forwarding companies and CFSs employees, even some KPA and KRA officers are also being investigated," said a police officer at the port.

He said the revenue body had threatened to cancel the licence of one of the CFSs.

The port of Mombasa has been hit by numerous scandals in the recent past, that involve release of goods and buying of goods at KRA auctions at the port using cheques meant for payment of fuel imports by oil marketers among others.

Other rackets involve releasing goods without duty being paid after declaring them as unfit for human consumption or substandard goods.

The 2006-2007 report of the Controller and Auditor-General says KRA could have lost more than Sh2 billion in revenue as a result of tax evasions at the port. The report says security bonds for goods destined for neighbouring countries worth more than Sh1.5 billion had not been accounted for.

"According to the Customs and Excise Act, evidence should be produced for exportation of transit goods within 21 days from the date of their importation and where no such evidence is produced, the goods are deemed to have been imported for home use and therefore liable for duty," the report adds.

The Auditor-General says that no such evidence had been produced.

The report also raises queries about customs bonded warehouses, saying that the government could have lost more than Sh500 million in revenue due to fraudulent activities.

"Examination of records maintained by seven customs bonded warehouses in Mombasa disclosed missing goods worth Sh679 million," the report says.

According to a register at Customs House Mombasa, goods with a customs value of Sh679 million were delivered to the warehouses. However, on physical check, the goods were not found.

The report adds that KRA also lost more than Sh56 million to suspected diversion of transit vehicles and other goods into the local market.

In 2008, the Kenya Anti-Corruption Commission unearthed the fraudulent release of goods from the port in Mombasa, before payment of duty and port levies.