KRA Uncovers Sh56M Smartphone Tax Scam at Eldoret Airport
The Kenya Revenue Authority (KRA) has uncovered a suspected tax evasion scheme involving thousands of smartphones that were allegedly under-declared in customs documents at Eldoret International Airport.
The Kenya Revenue Authority (KRA) has uncovered a suspected tax evasion scheme involving thousands of smartphones that were allegedly under-declared in customs documents at Eldoret International Airport.
KRA investigators discovered 55,607 ordinary smartphones in a consignment whose customs documents had declared only 3,000 phones. The investigation also found 309 undeclared high-end smartphones, pushing the estimated additional tax liability on the shipment to about Sh56 million.
The consignment was part of a larger shipment containing various electronics and consumer goods. According to KRA investigators, the cargo had been transported through Eldoret International Airport and was cleared using several customs entries.
Investigators began examining the shipment on September 11 and 12 after receiving intelligence that a cargo flight had arrived carrying suspected undeclared mobile phones and other high-value electronic products.
A physical inspection subsequently revealed a major difference between the goods listed in the customs documents and the items found inside the shipment.
One of the customs entries indicated that 3,000 mobile phones had been imported, each valued at about $10. However, officers discovered 55,607 ordinary smartphones, meaning 52,607 additional phones had not been declared.
KRA calculated that the total taxes payable on the ordinary smartphones amounted to about Sh49.92 million, compared with Sh2.52 million that had already been paid based on the declared quantity. This resulted in an additional tax liability of approximately Sh47.39 million.
The investigation further identified 309 undeclared premium smartphones, including models such as the Samsung Galaxy S26 Ultra, Samsung Galaxy Z Fold 8 and iPhone 17 Pro Max. Their inclusion increased the estimated tax liability to about Sh56 million.
The assessment includes import duty, excise duty, value-added tax, the Import Declaration Fee and the Railway Development Levy.
KRA said the valuation of the high-end phones remains provisional and could change after a formal assessment by its Customs Valuation and Tariff Unit.
The wider cargo shipment also contained hundreds of refurbished laptops, MacBooks, tablets, phone screens, Starlink units, printers, televisions, routers and other electronic equipment.
Investigators also found drones among the goods and recommended that they be detained pending the production of the necessary authorisation from the Kenya Civil Aviation Authority.
Under the East African Community Customs Management Act, such offences can attract significant financial penalties or imprisonment, depending on the circumstances of the case. KRA also has powers to compound certain customs offences through an administrative settlement.
KRA Commissioner for Investigations and Enforcement Mohamed M’maka said the authority was continuing to investigate tax evasion schemes as part of efforts to improve compliance and protect fair competition in the market.
The investigation comes amid increased scrutiny of customs declarations and the valuation of imported goods. KRA has been using intelligence, data analysis and physical inspections to identify discrepancies between declarations and actual consignments.
The authority has urged members of the public to provide information on suspected tax evasion through its anonymous reporting channels.
The Eldoret case has highlighted the challenges facing customs authorities in monitoring consolidated cargo, particularly shipments containing large quantities of electronics with different values and tax classifications.
