The Kenya Revenue Authority (KRA) has disrupted a syndicate involving exports of hides and skins at the port of Mombasa without payment of the required duty.
KRA said the syndicate undervalues the consignments and avoids paying taxes to the government.
Acting on an intelligence report, the KRA intercepted and seized two undervalued consignments of the commodities shortly before they were shipped.
The perpetrators had attempted to circumvent the law requiring duty to be paid for such exports at the rate of 80 per cent of the declared CIF or $0.52 per kilogramme, which is aimed at promoting the local hides and skins industry.
Two suspects arrested in connection with the scheme have been charged in Mombasa.
Mr David Ndile and Mr Bernadine on Friday appeared before Senior Resident Magistrate Ritta Orora and were charged with undervaluation with the intention of denying the government Sh2.8 million in export duty.
The two are accused of unlawfully trying to export raw hides and skins to Nigeria by fraudulently declaring the weights of each of two consignments as 5,000kg instead of 29,800kg and 30,500kg respectively.
They were also accused of making or causing to be made a declaration that is false or incorrect, contrary to the East African Community Customs Management Act 2004.
After receiving the intelligence report, a multi-agency team detained the two containers and upon verification in the presence of the exporter and clearing agent, it was established that the actual weights were 29,800kg and 30,500kg, respectively.
The suspects are directors of Daybee Investments Ltd, which exports hides and skins. They are accused of committing the offences on August 24, 2021 with others who had not been arrested.
They were released on Sh1 million cash bail each after denying the charges.
Last year, the KRA arrested three people and seized 25 containers of hides and skins meant for export.
The goods attracted an export duty obligation of more than Sh75 million.
The suspects in that case had attempted to bribe KRA and Ethics and Anti-Corruption Commission officials with over Sh700,000 to be allowed to export the goods without paying taxes.
The seized goods were among 50 containers of hides and skins that had been set aside for verification after the multi-agency team received intelligence reports regarding the value and weight of the contents.
The KRA says the scheme involves stuffing containers with raw hides and skins meant for export from local godowns in the absence of customs officers, followed by undervaluing of the contents. The three have also been charged in court.
Early last year, another hides and skins exporter was arrested and charged after attempting to deny the government taxes amounting to Sh1.7 million.
The exporter was said to have bought the goods locally but falsely indicated that they had originated in South Sudan.