How TECNO Kenya colludes with rogue KRA officers to evade paying tax running into billions of shillings – KRA officers collect bribes every week at Cardinal Otunga Plaza.
Transsion Holdings, the Chinese-based smartphone maker behind popular brands; TECNO, Infinix, itel and smart accessories brand oraimo is currently locked in serious claims of massive tax evasion, smuggling of undocumented Chinese workers and serious labour abuses in Kenya.
Whistleblowers have accused the firm of fleecing the country. According to investigative reports, the company which has been in operation in Kenya for over a decade, has evaded paying taxes amounting to over Sh400billion
Private Tax
There are accusations that the Chinese firm has been colluding with corrupt Kenya Revenue Authority (KRA) officials in the wider scheme to evade paying taxes.
“The Tecno and all Transion affiliates’ tax evasion is shocking. 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.” Blogger Nyakundi reported.
“I have very credible information that some KRA officials met with the Tecno country manager people and the KRA officers promised them protection amid tax evasion allegations. Tecno doesn’t have a CEO, they have a country manager named Ray Fang” he added.
The revelation of KRA officials allegedly collecting private taxes from Chinese companies like Tecno raises serious concerns and calls for thorough investigations into the claims.
Transparency and accountability must be upheld to ensure fair taxation practices and prevent tax evasion.
Despite not being listed among Kenya’s top tax-paying companies, Tecno allocates a significant Kshs. 3 billion -4 billion annual marketing budget to Kenya.
The company manufactures devices for local brands like Safaricom and JTL.
However, there have been allegations that Tecno conducts salary and other payments in cash, potentially skirting typical financial reporting.
Market Dimensions Limited that offers Human Resource (HR) Services to Transsion is also alleged to being a conduit in the larger tax evasion scheme.
One of Tecno’s suppliers has alleged to have experienced favoritism towards Chinese suppliers, upfront payment, and flexible timelines, while Kenyans were pushed to fund projects and wait 30 days.
He claims the Tecno managers dictates costs and constantly ask for kickbacks, which could frustrate his work. He adds that they pay suppliers cash, and their finance office, Cardinal Otunga Plaza in Nairobi, has a safe with millions daily transactions, where marketing and brand managers look for kickbacks.
Toxic work environment and Illegal labor importation of Chinese nationals.
There are reports that the Chinese employees at the firm are paid better than the locals a clear cut that has raised discrimination concerns and illegal labor importation of these individuals.
Transsion is facing internal tensions with Kenyan employees due to ongoing harassment and a decline in morale.
The Kenyan team has sent an urgent email warning management of potential industrial actions if their demands for better remuneration and working conditions are not met within five days.
HR has been pressuring regional managers to disassociate from the protest, in a move seen as an attempt to intimidate staff and downplay their concerns, potentially exacerbating the situation and leading to further unrest within the company.
In the wake of the exposé, Tecno has reportedly implemented measures such as document secrecy, increased security, and handling of foreign employees.
Staff in Nairobi have been instructed to remove and conceal documents that could be of interest to investigative bodies.
Extra security guards are being stationed at office doors, restricting entry only to individuals with proper identification. Some Chinese employees without proper work visas have been sent back to China to avoid legal scrutiny.
Tecno management is yet to issue a statement in the face of the serious allegations against the company that also run Carlare which is the official service center for Transsion products in Kenya.
Transsion has managed to capture Africa’s burgeoning demand for affordable smartphones and feature phones, dominating the mobile phone manufacturing industry. Its suite of brands, Tecno, Infinix and Itel, hold the largest market share of the African smartphone market at 48.2% – three times more than Samsung (16%), which is still the largest globally with a 21.7% market share in Q1 of 2021.
In 2008, Transsion founder George Zhu Zhaojang took a contrarian approach to sales by deciding to focus solely on selling phones in the African market, veering away from an oversaturated market in Asia. To date, the company has not sold a single phone in China, where they are manufactured.
Chinese firms are notorious for evading taxes, in a matter similar to Kenya.
The Indian Ministry of Finance accused prominent Chinese smartphone manufacturers, including Xiaomi, Vivo, and Oppo, evaded tariffs and illegally remitted a minimum of 80 billion rupees ($980 million) in India, according to a CNBC report. The report also stated that the Indian tax authorities were able to retrace only 18% of the total amount evaded by these companies.
KenyanHour 