Friday, March 4, 2011

Billions lost in illegal vehicles importation

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The government has in the last eight years lost billions in revenue following the importation of old vehicles whose beneficiary were politicians and politically connected foreigners, a court heard yesterday.

While giving evidence in the trial of former cabinet minister Henry Kosgei, former Public Works PS John Lonyangapuo said the exemptions were granted without consultations.

Longanyapuo said Kosgei exempted 79 vehicles without consulting Kebs while his predecessor Dr Mukisya Kitui exempted 3,000 while he was in office - losing import duty payable on every car aged more than eight years.

He told court that the exemptions were done directly by the minister upon receiving request from the importers. Among the beneficiaries who were named in court yesterday were Juja MP Willima Kabogo who imported two Hummers in 2007, a businessman from Tanzania and others from Pakistan. “KRA risked lost of revenue in excess of Sh2 billion due to the fraudulent importation," he said.

Lonyangapuo said the Kenya Auto Bazaar Association (KABA) – a lobby group for second hand motor dealers -- raised concern with his office prompting him to write to the minister over the issue. “I wrote to the minister and told him that some of the request of exemptions going directly to him need be cleared by Kebs,” he said.

He said it was in March 2010 when it became apparent that the country was being made a dumping site for aged vehicles after the exemptions became rampant.

He told court that some request would be passed to the PS office but some would go direct to the minister," he said. According to the PS, the minister ignored his advice and that of Kebs. He produced documents showing how individuals and companies were allowed to import as many as 12 vehicles.

In exempting the vehicles, the minister said he was acting on powers bestowed on him although he directed the importers to registrations fee. The aged vehicles allowed for used cars in the Kenyan market were allowed in after a publication of a legal notice gazetted in 2005.

The notice allowed importation of cars aged beyond the set limit in cases deemed to be in ‘the public interest’.

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