KRA said the method reflects a wider smuggling trend where small consignments of goods are concealed in luggage and parcels ferried in buses. /KRAThe Kenya Revenue Authority (KRA) has uncovered a new tax evasion tactic in which smugglers strip imported items of their original packaging to disguise them as second-hand products.
Officials say the method, which is gaining traction, is contributing to revenue losses and making it harder to track illegal trade.
For years, counterfeit excise stamps have been a common feature in the black market for alcohol and related goods.
However, KRA reports that the packaging scheme is a newer tactic, particularly among cross-border smugglers of high-demand products such as mobile phones.
The trend came to light in Isiolo, where a businessman was charged at Merti Law Courts with smuggling mobile phones from Ethiopia through the Moyale border.
He was arrested on October 24, 2024, with eight phones concealed in his luggage while travelling on a public bus.
According to KRA, the devices had been stripped of their packaging so they could be presented as used items.
“The multi-agency officers detected his tax evasion scheme that involved removing the gadgets from their original packaging to appear as used items, thereby concealing their true status,” KRA said in a statement.
The authority added that the method reflects a broader smuggling trend, where small consignments are hidden in luggage and parcels ferried on buses.
“This tactic makes detection difficult and causes significant revenue losses to the government,” the Commissioner for Investigations and Enforcement said.
KRA confirmed that the businessman was charged with acquiring uncustomed goods, contrary to sections 200(d)(iii) and 210(c) of the East African Community Customs Act (EACCMA) 2004.
In a separate case in Eldoret, four people, three men and a woman, were charged over an alleged tax evasion scheme involving alcohol and ethanol.
They appeared before Senior Principal Magistrate Onkoba Mogire, accused of manufacturing excisable goods without a licence and possessing restricted, excisable and uncustomed goods.
Prosecutors told the court the group operated an unlicensed plant in Ngeria, Uasin Gishu County, where alcohol affixed with counterfeit stamps was seized.
KRA said the alleged operation caused a tax loss of Sh446,456.
“The accused persons contravened the provisions of the East African Community Customs Act, 2004, and the Excise Duty Act, 2017,” the agency said.
The four denied the charges and were released on a bond of Sh200,000 or cash bail of Sh100,000.
The case will be mentioned on October 6, 2025.
Although the two cases differ, KRA said they reflect a wider crackdown on smuggling and illegal manufacturing operations that deprive the government of revenue.
“KRA, in collaboration with other government agencies under the multi-agency framework, is actively dismantling networks involved in elaborate tax evasion schemes linked to the smuggling of ethanol, illegal distilleries, packaging and production of counterfeit excise stamps, and distribution of illicit products,” the authority stated.
KRA added that such practices not only undermine fair competition but also expose consumers to health risks.
The authority urged traders and manufacturers to comply with the law to avoid arrest, seizures and prosecution.
“Liquor manufacturers are advised to obtain valid licences, while traders and transporters should deal only with licensed manufacturers and approved distributors, and maintain all the relevant documentation,” KRA said.
The emergence of tactics such as disguising new goods as used items highlights the ongoing cat-and-mouse game between smugglers and regulators. KRA says it will continue working with other agencies to close loopholes, safeguard public health and protect government revenue.
