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Customs Gravy Train Halt Now Targeting CFSs

id : 104 Tax Fraud   
posted by : Admin
 DOQ : 2020-05-24 01:00:08
   Admin
  
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The Kenya Revenue Authority has turned its guns on hundreds of Container Freight Stations (CFSs) on the Coast region as the crackdown on a suspected customs tax evasion network shifts to insiders.

The taxman this week summoned directors of 200 CFSs suspected to have conspired with its verification officers both at the port of Mombasa and at the document processing centre to pass entries that effectively denied the agency millions of shillings.

HISTORICAL BACKGROUND

The CFSs are customs-bonded warehouses. Due to lack of container storage space, ships were forced to queue out at sea for indefinite periods of time while importers paid high ship delay surcharges. In fact, matters got so bad cargo entering Mombasa could take up to 10 days to clear – that the then Managing Director, Abdallah Mwaruwa, was sacked two years into his appointment.

It was in this context that a group of private investors proposed to the Kenya Ports Authority (KPA) that they provide storage units in order to ease the burden on the container terminal. Soon thereafter, Container Freight Stations (CFSs) – managed privately but licensed as sites for customs clearance by the Kenya Revenue Authority (KRA) – rapidly spread in and around Mombasa.


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