How Multi-Billion Tecno Tax Evasion Scandal Slipped Through KRA Cracks

It was somewhere between April 2024 when whispers from within the offices of Tecno Transsion Electronics (Pvt) Ltd in Nairobi began to catch the attention of local authorities when allegations surfaced of financial misconduct, particularly regarding the non-remittance of Pay As You Earn (PAYE) deductions.

Many began speaking out about practices that raised serious questions about the company’s operations.

Soon what began as internal concerns soon attracted the attention of the Kenya Revenue Authority (KRA) which started to closely examine Tecno’s operations.

Among the most pressing accusations was the company’s alleged failure to meet its tax obligations.

KRA agents launched a thorough investigation that culminated in a dramatic raid at Tecno’s Nairobi offices in Cardinal Otunga Plaza in May 2024.

Inside the offices, agents recovered a stockpile of documents which were to help KRA demonstrate undisclosed salary payments, unreported supplier transactions and a pattern of financial mismanagement that had long been hidden from the public eye.

Agents also reportedly seized large sums of cash in both local and international denominations indicating a possible attempt to avoid traceable transactions and tax liabilities.

Following the raid, the mood among the whistleblowers was one of cautious optimism.

For the first time, it seemed like the full extent of Tecno’s alleged financial mismanagement, racial abuse and labour violations were in the hands of the authorities.

The whistleblowers had gone to great lengths to share information about Tecno’s operations through independent journalists, bloggers and anonymous tip-offs to watchdog organizations.

Many had already seen firsthand the troubles that permeated the company.

They hoped that the raid marked the beginning of accountability.

The issues were clear: salaries paid in cash with no records, PAYE deductions being taken from employees wages but never remitted and foreign workers operating without proper documentation.

In fact, up to this day, numerous reports from employees at the company confirm the widespread presence of undocumented foreign workers primarily from Asia who have been employed at the company without undergoing the proper immigration processes or obtaining work permits.

It is no wonder that these same employees, who enter the country illegally, go on to wield their unchecked power over Kenyan workers with brazen impunity.

Kenyan staff at Tecno are subjected to verbal insults, denied promotions and discriminated against to levels that make it nearly impossible to do their job.

The atmosphere is one where exploitation runs rampant, as these foreign workers take advantage of their status, knowing there is little accountability.

Criticism of management is not only discouraged but met with swift retaliation.

By the time KRA raided Tecno in May 2024, there was already a profound sense of division and injustice within the company.

Yet, as time passed, the initial surge of optimism fueled by the hope that this raid would finally lead to accountability began to fade.

Even after KRA recovered mountains of evidence in documents and cash that had been deliberately funnelled outside the banking system, nothing seemed to happen.

It was as if the ground beneath the investigation began to shift.

The once fierce determination started to wane the investigation suddenly came to a standstill.

So, what happened?

How did an investigation that began with so much promise collapse under the weight of silence from KRA?

Was it simply abandoned or did Tecno have the right connections to avoid the full force of the law?

The once-optimistic whistleblowers who had courageously come forward with explosive information are now too terrified to speak.

From what they now fearfully whisper, it seems the very agents tasked with holding the culprits accountable may have been compromised.

KRA agents involved in this raid, initially seen as champions of justice are now allies of the oppressor.

How else could one explain the abrupt halt to the probe, especially when the evidence recovered from Tecno’s office was so damning?

All the information pointed toward a pattern of tax evasion at Tecno and nothing has changed.

The company still does not appear on the list of the top tax contributors in Kenya.

Insiders inside the company continue to report that the issues that sparked the whistleblowing campaign are far from over.

Non-remittance of Pay As You Earn (PAYE) deductions which had initially been flagged by employees is still very much alive.

Employees continue to have their salaries deducted for taxes only to find that the government never sees a shilling of those deductions.

Under the stewardship of Commissioner General Humphrey Wattanga, KRA has demonstrated a relentless drive to tax the smallest earners.

But what is infuriating is the glaring absence of the same drive when it comes to addressing massive corporate tax evasion.

How is it that the very companies responsible for generating billions of shillings in revenue, with marketing budgets that run into the millions, can so easily avoid paying taxes?

How can we, the citizens, be made to suffer under crushing taxes while these corporate giants are allowed to go free?

Humphrey Wattanga must step forward to explain why huge foreign-owned companies like Tecno which profit from the Kenyan market are not being held accountable for tax evasion.

How can Mr Wattanga convincingly deny that its agents and top officials are not receiving brown envelopes to look the other way while billions in taxes are lost to these foreign companies?

To fully understand the impact of Tecno Transsion Electronics and similar multinational corporations, one needs only to observe the scale of their operations in our local market.

Infinix, Tecno and ITEL.

These brands are some of the most widely used in Kenya.

They have a massive presence in the market, with stores, kiosks and distributors reaching every corner of the country.

Over the years Tecno has reportedly evaded up to Ksh 400 billion in taxes.

That is nearly half a trillion Kenyan shillings lost in unpaid taxes.

The accountability gap has reached a point where citizens now feel disillusioned.

Commissioner General Humphrey Wattanga and KRA must act decisively.

Failure to do so will only fuel public anger and continue to foster a sense of betrayal among Kenyans who tirelessly work, pay taxes and abide by the laws.

This unchecked arrogance from companies like Tecno could ignite a wave of public rage that cannot be ignored.

The anger that drove thousands of Kenyans to the streets in June 2024 is still fresh in everyone’s memory.

If corporations like Tecno keep dodging taxes with impunity don’t be surprised if Kenyans rise up once again with even greater fury.

At this point, it’s no longer a question of if, but when.

Rest assured, we will continue to monitor Tecno operations in Kenya and hold KRA accountable for their actions (or lack thereof) in dealing with this brazen tax evasion.

We will also actively seek out more sources, whistleblowers and insiders many of who are understandably terrified but deeply invested in seeing justice finally served.

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