Car dealers are blaming corruption in government for the high rate of illegally registered motor vehicles in the country.
This the dealers said has denied them business while denying the government tax revenue.
Their concerns comes as the National Police Service closes in on 301 illegally registered vehicle owners after Deputy Inspector General Edward Mbugua ordered the impounding of the units.
In a memo to the regional police dated February 13 Mbugua said some of the illegally registered vehicles are on transit and have been caveated.
"You are directed to immediately mount an operation and detain the vehicles and the drivers," he said.
Among the units, 40 were destined for Uganda, 30 were headed to South Sudan, DR Congo(five) Malawi and Somalia bound were one each.
Others are linked to local car dealers, construction companies,manufacturers, religious institutions and individuals, with ownership linked to a total of 269 persons and entities.
Yesterday, dealers through the Kenya Auto Bazaar Association(KABA) and the Car Importers Association of Kenya(CIAK) decried the high level of illegal registration, which has also seen a rise in duplicate number plates.
This has been blamed on among others, laxity and conspiracy among rogue dealers and state officials at the National Transport and Safety Authority (NTSA), whom have formed a car syndicate to evade taxes on imports destined for Kenya and diversion of transit units into the local market.
“NTSA is to blame and to certain extent KRA. corruption issues,” KABA chairman John Kipchumba told the Star yesterday.
According to KABA which represents more than 1,000 car dealers, all vehicles leaving the Port of Mombasa for the Kenyan market must be registered.
However, this is being flouted by authorities where a section of officials are gaining from the move.
“We have pointed out this several times but we are taken round and round,” Kipchumba alluded, “for transit, once in the market they are taken to KRA as those that left port without registration. That is the loophole and they know.”
KRA has previously allowed exit of units from the port without number plates, but with logbooks and a third identifier stickers, to ease the clearance congestion.
CIAK yesterday said diversion and illegal registration is costing its members billions as their stocks remain unsold. The government is also another loser on import duty on used cars.
For instance between Sh380,000 and Sh450,000 import duty is lost for a unit retailing at an average of Sh1.25 million.
“Those doing the illegal business should be brought to book,” CIAK chairman Peter Otieno said.
He has called for close collaboration between the government, importers and dealers to seal the existing loopholes.
Reached for comment, NTSA communications officer Antony Nyongesa said: “I am not in a position to comment on that.”
KRA on the other hand has been closely monitoring its staff to weed out rogue individuals.
Last month, the authority fired five officers working at the Regional Electronic Cargo Tracking System for alleged involvement in a tax evasion schemes.
