An analysis of official data showed that imports valued at around Ksh300 billion exported from China to Kenya were either under-declared or diverted.
The analysis of the General Administration of Customs in China, valued the goods at Ksh738.9 billion to Kenya, in the 12 months to December 2021.
However, according to the Kenya National Bureau of Statistics (KNBS) the value of the goods for the same period was Ksh441.5 billion.
Kennedy Manyala,an economist, fears that there might be an element of “misreporting” and a high possibility of under-declaration by the traders alone or in collusion with customs officers.
There is also a possibility that the exports recorded by the Chinese government don’t make it to Kenya.
The Standard also reported that experts indicated that the taxman was losing revenue since goods coming in from China aren't going through the correct channels
If the consignment from China attracted the lowest import duty of 10%, the country would have gained almost 30 billion in taxes.
The tax agency has before noted that there are several instances where imported goods are under-declared. As a result, they launched a crackdown on consolidated cargo, triggering an outcry from small traders.
Imports from China hit a new high of Ksh441 billion in 2021, a 22% increase from 2020. Meanwhile, Kenya’s total export earnings stood at Ksh739 billion.
This means that for every Ksh100 Kenya earned from trade, it paid Ksh60 to China to purchase Chinese products.
Additionally, Kenya spent Ksh107.5 billion to China as debt repayment. The trade deficit with China is the largest of Kenya’s major trading partners.
Goods imported from China include electronics, household goods, construction machinery, clothing items and commercial vehicles.
On the other hand, Kenya’s exports to China are mainly raw materials, minerals and ores, which are however produced in low volumes.
