Chinese Smartphone Giant, Transsion, Embroiled In Sh400b Tax Evasion In Kenya

In a scandal that threatens the integrity of Kenya’s tax collection system, Kenya Revenue Authority (KRA) officials are accused of colluding with Chinese smartphone giant Transsion Holdings, the company behind TECNO, Infinix, and ITEL brands, to aid in the evasion of over Sh400 billion in taxes.

These allegations have raised serious concerns about the rampant corruption within the KRA, and the ease with which large multinational corporations can exploit Kenya’s tax system.

According to wistleblowers and investigative reports, KRA officials have been turning a blind eye to Transsion’s questionable financial practices for years.

Transsion Holdings, which has been operating in Kenya for more than a decade, allegedly avoids paying taxes by engaging in underhanded dealings with corrupt tax officials.

This has allowed the company to evade billions of shillings in taxes, depriving the Kenyan government of much-needed revenue.

Blogger Cyprian Nyakundi, a vocal whistleblower, has exposed shocking details of how KRA officials have been involved in facilitating this tax evasion.

“Insiders tell me we are talking about an excess of Ksh. 400 billion evaded. KRA staff collect what we call a private tax to enable the crimes,” Nyakundi revealed in a recent post.

He claims that KRA officials have been collecting bribes from Transsion’s country management to allow the company to continue its operations without scrutiny.

Nyakundi also disclosed that meetings between KRA officials and representatives of Transsion’s TECNO brand were held to discuss how the officials could protect the company from facing legal consequences for its tax evasion practices.

“I have credible information that some KRA officials met with TECNO’s country manager, Ray Fang, and promised them protection amid the growing allegations of tax evasion,” Nyakundi stated.

The scale of this alleged tax evasion is staggering, particularly when compared to Transsion’s dominance in Kenya’s mobile phone market.

Despite its widespread operations, the company has notably avoided being listed among Kenya’s top taxpayers, sparking further suspicion about the company’s financial practices.

Transsion’s reported annual marketing budget in Kenya ranges from Ksh 3 billion to Ksh 4 billion, yet the firm’s tax contributions are mysteriously absent from public records.

The accusations point to a well-oiled scheme within KRA, where officials deliberately turn a blind eye to irregularities in exchange for personal gain. In return for bribes, KRA officials allegedly allow

Transsion to falsify records, underreport earnings, and bypass standard tax procedures.

This “private tax” collected by corrupt officials ensures that the company’s illegal practices go unchecked.

Transsion’s reported method of conducting financial transactions in cash further complicates the situation.

It is alleged that the company avoids using official banking channels to pay employees and suppliers, thereby skirting financial reporting requirements.

This cash-based system raises questions about the transparency of the firm’s financial dealings and opens up further opportunities for tax evasion.

In a broader sense, the involvement of KRA officials in such schemes highlights the deep-rooted corruption within Kenya’s tax collection system.

The very institution responsible for ensuring that taxes are paid and collected fairly appears to be complicit in helping multinational corporations like Transsion escape their fiscal responsibilities.

This is not the first time KRA officials have been implicated in corruption scandals.

Past incidents have shown that the KRA has a long-standing problem with internal fraud, with officials often accused of accepting bribes in exchange for favouring wealthy corporations and individuals.

The revelations surrounding Transsion and the KRA now cast a spotlight on Kenya’s need for urgent reforms within its tax authority.

Without transparency, accountability, and strict enforcement, Kenya’s tax system remains vulnerable to manipulation by corrupt officials and corporations, resulting in massive losses of public funds.

Whether authorities will take decisive action to bring those involved to justice remains to be seen, but the damage to the credibility of Kenya’s tax system is already evident.