One of the women arrested at the JKIA for smuggling over Ksh102 Million into the country on October 7, 2022. CAPITAL GROUP
Customs officers at the Jomo Kenyatta International Airport (JKIA) arrested six women accused of smuggling over Ksh103 million on Thursday, October 6.
The six women of Somali descent were reportedly travelling from India with the money stashed in their luggage in the form of US dollars.
Customs officers from the Kenya Revenue Authority (KRA) detected the presence of the money after scanning their luggage. The cash, according to the statement from the authority, was hidden in shoes and clothes.
"Customs officers based at Jomo Kenyatta International Airport (JKIA) have intercepted Kshs102 million in foreign currency from six female travellers. The suspects had arrived in the country from India," a statement issued by investigative agencies read.
Fake gold bars seized at Jomo Kenyatta International Airport (JKIA) TWITTER
Travellers were urged to observe the set routines for the declaration of items upon departure and arrival at the various entry points. "Passengers should correctly declare all cargo and items at the ports of entry and exit as required under the provisions of the Second and Third Schedules of the EAC Customs Management Act, 2004," the statement read.
Customs rules stipulate that travellers should declare, among other items, money exceeding Ksh1 million.
Gifts brought home for relatives, items meant for resale in the country and liquors exceeding one litre or wine exceeding two litres should also be disclosed. In addition, passengers must declare perfumes and toiletries exceeding one litre.
The law further states that all passengers must allow customs officers to scan their luggage. Giving false information to the officials is considered an offence.
“It is an offence under the East African Community Customs Management Act 2004 to give false information to a customs officer, and it is punishable under Section 203 of the said Act, including forfeiture of the subject goods and other relevant laws," investigative agencies state.
Passengers are further required to pay customs duty for any goods brought into the country at the point of entry.
However, some categories of goods and passengers are exempted, including those that are meant for goods for personal and household use, as well as used goods.
The duty is paid to customs officers stationed at the airports or seaports.
An undated image of Times Tower which houses Kenya Revenue Authority offices. By Robinson Ndungu, Kenyans.co.ke
For households, the Chancellor brought forward the cut to the basic rate of income tax from 20pc to 19pc and reversed the National Insurance rise - a giveaway worth £22bn next year.
It was sold as a radical departure in Britain’s tax policy, the biggest cuts for 50 years. But the Chancellor gave with one hand and took with the other.
Kwarteng’s mini-Budget is as much about what the Chancellor didn’t do as what he did. He crucially decided to keep Rishi Sunak’s policy of freezing multiple tax thresholds for four years, a stealth raid that has been turbocharged by inflation.
“If it is tax cutting, it's not very tax cutting [when] taken in the round,” says Tom Clougherty, research director and head of tax at the Centre for Policy Studies.
“They did cut National Insurance rates but they had only raised them in April… the income tax basic rate cut Rishi Sunak had already announced, and it's been brought forward by year so again that’s a bit of a tax cut but not a huge one.”
Clougherty says the cuts need to be weighed up against “the year by year impact of the threshold freeze”.
The market-rattling mini-Budget was perhaps not as radical as investors feared when the full picture on tax is considered, experts say.
As Britain emerged from the pandemic borrowing binge, Rishi Sunak decided to freeze a number of tax thresholds for four years, such as the personal allowance and higher rate limit on income tax.
Rising prices and wages over that period will push taxpayers into higher bands, generating more revenue for the Exchequer. This stealth tax was intended to help shore up the public finances but the “fiscal drag” effect has proved to be enormous thanks to the highest inflation for 40 years.
The Institute for Fiscal Studies estimates that for every £1 households gained from the personal tax cuts announced by Kwarteng, they will lose £2 from the freezes to tax thresholds and benefit increases by 2025-26. The Exchequer will get a £41bn boost from households paying extra tax under this fiscal drag effect but families will get just £20bn back in personal tax giveaways.
Doug McWilliams, deputy director at the Centre for Economics and Business Research, says: “The fiscal drag pushes up the tax take for virtually everyone, much more than the 1p cut the income tax rate.
“There were some taxes that were cut: stamp duty and so on. There were some taxes that would have gone up that he didn't put up. These are genuine gains compared with the alternatives.”
The average household will face a 3.3pc hit to their incomes, equivalent to £1,450, from the freezes alone. The personal allowance freeze, for example, will cost the typical basic and higher rate taxpayer £500 and £3,000 by 2025-26, respectively.
Not only are taxpayers paying more to the Exchequer from fiscal drag but more Britons than ever before face demands from the taxman.
A record-matching 66pc of adults will be paying income tax by 2025-26 - an additional 1.4m - while an all-time high of 14pc will pay the higher rate, an extra 1.6m. The proportion of taxpayers paying the higher rate is double the share in 2009-10 and almost four times that in 1990.
Tom Waters, economist at the IFS, says: “The tax burden on households will be going up in the coming years and that’s the combined consequences of two offsetting effects: the tax cuts that have been announced and these fiscal drag freezes.”
“They are less transparent and the second thing is they're a lot more uncertain,” he says.
“Over the Conservative leadership contest, there was an enormous amount of discussion about the National Insurance rise and virtually none about the income tax threshold freeze, even though the income tax threshold freeze was actually a bigger tax rise than the NICs rise.”
Indefinite freezes, such as the £150,000 additional tax rate threshold, are “particularly unjustifiable” as they are not typically announced, he says.
This has long been a tactic used by the Government to stealthily either boost tax revenue or reduce spending in real terms by freezing the cash value of the thresholds.
The problem with the sneaky strategy is that the amount raised or saved from the policy cannot be controlled by the Chancellor. Instead it depends entirely on inflation and wages, which are out of the control of ministers.
Perhaps one of the more absurd examples is the £10 per year Christmas bonus, which is paid every December to pensioners and people on certain benefits.
As the IFS points out, the bonus was set at £10 in 1977 but has been frozen at that level ever since, becoming less and less generous each year. If it had increased in line with prices, the Christmas Bonus would be worth £56.
This effect becomes quite a squeeze on incomes when applied to the biggest taxes and benefits. If the income tax personal allowance had not been frozen, the point at which workers begin paying it would rise from £12,570 in 2021-22 to £12,950 in 2022-23. Over a four-year freeze this effect is only amplified, causing a large impact.
Given how much the Chancellor will rake in from fiscal drag, some believe the extreme reaction to the mini-Budget was excessive.
Gilt yields soared above 4pc and the pound crashed to record lows in the days after amid fears that Kwarteng was rolling the dice with the country’s finances. But fiscal drag is likely to help the public finances considerably, something an official forecast by the Office for the Budget Responsibility may have shown if the Chancellor had allowed it.
McWilliams says: “The extent to which the markets got spooked by the Budget was partly on the basis of them not really being very good at doing the mental arithmetic, which was actually available at the time.
“We showed it was a much smaller Budget than people had been led to think.”
The CEBR believes the fiscal position is far stronger than markets assume because of a combination of fiscal drag, an overestimation of the cost of tax cuts by the Treasury and an expected fall in gas prices. It expects borrowing to fall to £64bn in 2023/24, with the Government running a surplus by 2025/26 if energy prices ease as forecast.
“It’s one of the things that makes the slightly hysterical reaction to the mini-Budget quite hard to wrap your head around,” says Clougherty.
“We really were only going back to the tax burden of like a year ago,” he says.
“There's a reason why freezing thresholds is quite a good way to raise money and it's because people don't notice it as much as the more explicit increases to tax rates.
“But maybe equally, you don't get the fiscal conservative benefits of raising taxes in that way, again because it flies somewhat under the radar.” By Tom Rees, Telegraph
•On August 16, 2022, EACC issued a Demand Notice to the company, and to the nine officials to remit the above amount.
•The Commission said the defendants failed to pay back the amount as demanded prompting it to file a recovery suit in the High Court on Tuesday.
Ethics and Anti-Corruption Commission has filed a suit seeking to recover Sh21,697,500 allegedly embezzled by a private company.
The private company is believed to have been in collision with nine officials from the State Department of Correctional Services.
The Commission said it has already investigated the allegations of embezzlement and misappropriation of public funds, abuse of office, breach of trust and fraud against the aforementioned.
EACC established that during the Financial Years 2016/2017, 2017/2018 and 2018/2019, the firm, fraudulently received a total of Sh21,697,500 from the State Department of Correctional Services on account of goods (food and rations) not supplied.
"A fraudulent scheme was perpetrated jointly by all of the defendants, involving the making of false procurement documents including requisition forms, Local Purchase Orders (LPOs), delivery notes, inspection and acceptance certificates, and Invoices which were used to support payment vouchers," the anti-graft body said.
It added that payment vouchers supported by falsified documents were then used by the officers to effect the payments.
On August 16, 2022, EACC issued a Demand Notice to the company, and to the nine officials to remit the above amount.
The Commission said the defendants failed to pay back the amount as demanded prompting it to file a recovery suit in the High Court on Tuesday.
The company is accused of falsifying documents and submitting falsified documents to facilitate payment for goods not supplied.
It's also accused of transferring some funds to other recipients in a bid to conceal the fraudulently acquired funds and using the funds to purchase properties for their benefit or in a bid to conceal the proceeds of corruption and economic crime.
The nine officials were jointly faulted with five offences.
They include failure to adhere to ethical standards in the execution of their duties as Public Officers contrary to the Law and abuse of office powers.
Others include engaging in conduct that contravenes the national values and principles of governance provided for under Article 10 and values and principles of public service as provided under Article 232 of the Constitution.
They are also faulted for being in violation of section 42(3) of the Anti-Corruption and Economic Crimes Act, 2003 with regard to conflict of interest.
EACC regretted that despite efforts to curb fraud and graft, cases of individual public officers robbing public funds continue to thrive.
"This points to possible collusion, connivance or abdication of duty by accounting officers," the Commission concluded.
"EACC, therefore, calls upon all accounting officers of public entities to take up their responsibilities in protecting the public funds entrusted under their care and control."
It pointed out that under the Public Finance and Management Act, the officers have a mandatory legal obligation to protect public funds from misuse or embezzlement. By SHARON MWENDE, The Star
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