KENYA Revenue Authority has set up a 300-man team to fight illicit trade that denies the government billions in revenue through tax evasion. KRA acting chief manager in the investigations department Caxton Ngeywo said the authority decided to beef up its investigations team because the vice is rampant and agencies like Anti Counterfeit Agency do not have enough inspectors and personnel to effectively tackle this problem. "Most of the illicit trade is in the form of fraud in tax laws," said Ngeywo. He added that the team which is already in place is likely to begin work in January.
Ngeywo was speaking during a workshop on illicit trade in tobacco products within Kenya. The event was organised by Kenya Institute for Public Policy Research and Analysis at a Nairobi hotel yesterday.
While none of the speakers gave exact figures on how much illicit trade costs the tobacco business alone, participants at the event said most of this trade occurs when goods destined for export market are sold into the country illegally or when raw materials like a tobacco leaf that are smuggled into the country. "We want to look at illict trade beyond tobacco because there are many other areas that we have this problem," said Ngeywo.
In June, global giants in cigarette manufacturing BAT, Imperial Tobacco Group, Japan Tobacco and Philip Morris International teamed up to fight the sale of illicit cigarettes which at the time was estimated to cost governments US$40 billion annually.
The four firms formed the digital coding and tracking association to use technology in tracing illegal imports and exports of cigarette sticks. Apart from cigarettes, Kenya has also experienced a rise in illegal alcohol trade.
The new KRA unit is meant to nab traders and also staff of various agencies that collude with counterfeiters and smugglers to drive illegal trade of various items.