The Kenya Revenue Authority has intercepted 21,600 undeclared high-end smartphones valued at Sh16.1 million in unpaid taxes at Eldoret International Airport, dealing a significant blow to a sophisticated smuggling operation that has been bleeding the exchequer of millions in revenue.
The seizure, announced on Saturday, was part of a larger consignment that included 5,000 declared smartphones worth Sh6.4 million, alongside shoes, clothes, auto spare parts, household items and electronic accessories.
The cargo arrived aboard a plane that touched down on September 18, following what KRA described as an intelligence-led operation.
According to the tax authority, investigations revealed that the smuggled phones had been deliberately misdeclared or concealed under false categories in a bid to evade customs duties.
The consignment was destined for Pemba Cargo Limited but had been declared by Portyard Limited through consolidated cargo arrangements.
"The declarations of the goods were done either expressly or under consolidated cargo under each category," KRA stated in its press release, indicating the sophisticated nature of the evasion scheme.
The operation represents a violation of Section 203 of the East Africa Community Customs Management Act (EACCMA) 2004, which criminalizes false customs declarations and fraudulent tax evasion.
Offenders face imprisonment for up to three years or fines not exceeding ten thousand dollars upon conviction.
The interception highlights the growing challenge of smartphone smuggling at Kenya's airports, where high-value electronics are increasingly being trafficked through elaborate schemes designed to circumvent tax obligations.
The undeclared phones represent a significant loss to the government's revenue collection efforts, particularly as smartphone imports continue to surge with growing digital adoption.
KRA's Commissioner for Investigations and Enforcement emphasized the authority's commitment to combating tax evasion, stating that such operations are crucial for boosting compliance and ensuring fair trade practices within the market.
The seizure comes amid heightened efforts by KRA to plug revenue leakages through enhanced surveillance and intelligence gathering.
The authority has been working to strengthen its enforcement capabilities at key entry points, with Eldoret International Airport being a critical focus area given its strategic location and growing cargo volumes.
Industry sources indicate that smartphone smuggling has become increasingly sophisticated, with criminals exploiting loopholes in consolidated cargo arrangements to disguise high-value electronics as lower-taxed household goods or clothing items.
The successful operation demonstrates KRA's enhanced capacity to detect and intercept such schemes, potentially deterring similar attempts by other smuggling networks.
However, it also underscores the persistent challenges facing Kenya's customs enforcement, where criminal networks continue to devise new methods to evade taxes on high-value imports.
The authority has indicated investigations into the matter are ongoing, with officials working to identify all parties involved in the smuggling scheme.
This includes the role of clearing agents, cargo handlers and any other facilitators who may have enabled the operation.
The case is expected to serve as a warning to other potential tax evaders, particularly in the rapidly growing electronics import sector where profits margins can make the risks of smuggling appear attractive to criminal networks.
As Kenya continues to digitize its economy and smartphone penetration increases, authorities face the challenge of balancing legitimate trade facilitation with robust enforcement mechanisms against smuggling and tax evasion in this lucrative sector.
