A hides and skins exporter has been charged with tax evasion after the Kenya Revenue Authority (KRA) unearthed a syndicate in which traders export the goods without paying duty, denying the taxman Sh1.7 million in revenue.
KRA says unscrupulous traders export locally sourced hides and skins as transit cargo originating from South Sudan.
Onywa Caleb Orwa was arraigned on Wednesday for false declaration of goods at the Port of Mombasa leading to loss of revenue amounting to Sh1.7 million.
Mr Orwa is accused, jointly with others still at large, of falsely declaring 6,000 pieces of dried hides and skins to have been in transit from South Sudan with the intention of evading paying the correct export duty.
The trader, who appeared before Mombasa Senior Resident Magistrate Christine Ogweno, denied the accusation.
The taxman claimed that the suspect, being a representative of the exporter, knowingly concerned in the fraudulent evasion of payment of duty contrary to the law.
He is alleged to have committed the offence on September 11, last year, within the country.
The suspect was remanded in custody after the court was informed that he had jumped bail in another criminal case, where he is facing a similar offence.
“Police have been looking for the suspect after he failed to attend court where he is also facing a similar criminal offence,” said State prosecutor Vallerie Ongeti.
But, Mr Orwa claimed to have been in isolation for 21 days after a Covid-19 diagnosis.
“I did not jump bail. I tested positive for coronavirus and was placed in a mandatory isolation centre here in Mombasa. I could therefore not attend court as this would mean I would have broken the Ministry of Health protocols meant to curb the spread of the disease,” he said.
However, the prosecutor dismissed the Covid-19 claim, noting that records show the suspect had on two occasions, within the 21 days he claimed to have been in isolation, visited KRA offices over the tax evasion case.
The taxman said that on September 21, 2020, its investigation and enforcement officers seized a 40-foot container with hides and skins declared as transit cargo for export to Nigeria.
Its probe further revealed that the goods never originated from South Sudan, but were instead obtained locally.
“It is worth noting that exportation of hides and skins is a restricted export that attracts export duty and by misdeclaring the country of origin, the exporter is perpetuating tax evasion,” KRA said.
The taxman further noted that the exporter of the goods is liable to violation of the East African Community Customs Management Act.
The consignment is lying at the Kilindini Port police.
Mr Orwa has been remanded at Central police station until April 1.
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