ISIOLO, Kenya – The Kenya Revenue Authority (KRA) has flagged a new tax evasion tactic where smugglers strip imported goods of their original packaging to disguise them as second-hand items.
According to KRA, the method, increasingly common at border points, is making it harder to detect contraband and is costing the government millions in lost revenue.
Officials say mobile phones are among the most targeted products, with smugglers presenting them as “used” to evade import duties.
The scheme was recently exposed in Isiolo when a businessman was arrested with eight mobile phones hidden in his luggage while travelling on a public bus from Moyale.
The devices had been removed from their packaging to appear second-hand. He was arraigned at the Merti Law Courts and charged with acquiring uncustomed goods under the East African Community Customs Act (EACCMA), 2004.
“This tactic makes detection difficult and causes significant revenue losses to the government,” the Commissioner for Investigations and Enforcement said in a statement.
The incident adds to a growing list of smuggling cases that KRA is pursuing.
In Eldoret, four suspects — three men and a woman — were arraigned over an alleged illegal alcohol operation in Uasin Gishu County.
Prosecutors told the court the group was running an unlicensed plant in Ngeria, where alcohol affixed with counterfeit excise stamps was seized. The taxman estimates the scheme cost the government Sh446,456 in revenue.
The suspects, who denied the charges, were released on a bond of Sh200,000 or cash bail of Sh100,000. Their case will be mentioned on October 6, 2025.
KRA says such cases are part of a wider crackdown on cross-border smuggling and illegal manufacturing that undermine fair competition, fuel the black market and expose consumers to health risks.
“KRA, in collaboration with other agencies, is actively dismantling networks involved in elaborate tax evasion schemes linked to smuggling of ethanol, illegal distilleries, counterfeit excise stamps and illicit products,” the agency stated.
The authority urged manufacturers and traders to comply with licensing and tax laws, warning that non-compliance will attract arrests, seizures and prosecution.
