Taxman to set up office in Eastleigh to smoke out tax evaders

The Kenya Revenue Authority (KRA) is set to open an office in Eastleigh as it focuses on smoking out tax cheats.

According to the taxman, they are scouting for an appropriate building to host its operations in the business hub.

KRA will lease office space for six years as it seeks to maximise revenue collection in Eastleigh.

Eastleigh, a dishevelled neighbourhood, is said to have been built on trade, tax evasion, smuggling and regional connections.

It is home to a number of small-scale traders who rely on malls for business and transact billions of shillings annually.

Since the political collapse of neighbouring Somalia more than 20 years ago, traders from that country have made their second home in what was once an Asian residential estate.

So strong is their trading network that this area in the heart of the Kenyan capital is better known as “Little Mogadishu”.

Despite hosting brisk business running into millions of dollars, Eastleigh remains by and large a Somali enclave with little Government presence making it easy for tax evasion rings to smuggle goods into the market without as much ado.

In the past, the taxman carried out raids on suspected tax evaders in Eastleigh.

In 2016, the Assets Recovery Agency (ARA) froze bank accounts and property belonging to Eastleigh Mall that is owned by Kenya’s ambassador to Saudi Arabia Mohamed Mohamud and his partners.

The ARA, backed by KRA obtained a court order barring directors of Eastleigh Mall from interfering with its assets, pending determination of a Sh385 million tax evasion suit the agencies have filed against the shopping complex.

The order effectively barred directors of the company from selling, transferring shares and winding up processes that may lead to dilution or disposal of the disputed property.

“An order is hereby issued restraining the sale, transfer of shares, change of directorship, winding up or any other dealing in respect of the Eastleigh Mall Limited to avoid dissipation of or disposal of the property,” said the court order.

Eastleigh Mall’s owners have since 2015 been fighting the taxman over the multi-million-shilling tax bill that was the subject of tax evasion charges before Nairobi’s Milimani Chief Magistrate’s Court.

The ARA said in court papers that the mall owners had been transferring cash from Eastleigh Mall’s 18 bank accounts, leaving a paltry Sh626,000 by mid last week.

The Assets Recovery Agency feared that the mall’s owners may try to dispose of the establishment’s assets and needed to be stopped.