Is it possible to compete with tax-evading Somalis?

[mbwakali]

@Jimjones

I have capital… My problem is that you cannot effectively compete with blatant tax evaders. Unless you also evade all taxes as they do.

I also ‘heard’ they import their goods via small planes from Somali via ELD airport. Sio Mombasa KPA & SGR shenanigans

[Jimjones]

@LuandaMagere

wahenga walisema if you cant beat them , join them

I agree with you… Unfortunately! Then KRA will target a non Somali…

[Jimjones]

@mbwakali

I also ‘heard’ they import their goods via small planes from Somali via ELD airport. Sio Mombasa KPA & SGR shenanigans

Sure… That is done now by many people… The problem comes in when selling goods… It’s only in Wariah filled Eastleigb where it’s cash only… This helps them evade VAT, income tax on sales…

[upepo]

@Jimjones

I have been in Eastleigh a few times and realized that these fellows sell goods on cash or by M-Pesa withdrawals only… Their prices are normally far much lower than the other shops outside that area which are better documented. Now, they appear to achieve these prices by not paying import duty and also VAT and Income tax. Now, how possible is it to beat these fellows while paying taxes and complying with our laws? Ama one has to just go there and set up similar units and play the game as they do? Does KRA conduct surveillance operations there as they do in town and other areas? Are they protected by some cartels somewhere?

The accusation of tax evasion is a convenient way of denying credit to Somali businesses, who have overcome great odds to transform Eastleigh into the most vibrant business center in the region. Let me ask you a question; What makes you think they invented tax evasion? Why do you think they found it necessary to engage in such?

Tax evasion is old as the country itself. Indians had perfected this practice, only that they did not pass the savings to the end-consumers, but instead used the extra earnings to lead opulent lifestyles. The Indian cartels were so entrenched, they could even bribe customs officers to reject the bribes of new businesses. That way they kept a tight control in trade in most goods. Today, many Indian shops have disappeared because they can no longer enjoy the huge margins they were once used to, thanks to Eastleigh businesses. On the upside, most peasants, like you, can afford new clothing.

The Somali community has exploited cultural values to gain an edge in the business world. This ought to be the point of discussion.

[Jimjones]

@upepo

The accusation of tax evasion is a convenient way of denying credit to Somali businesses, who have overcome great odds to transform Eastleigh into the most vibrant business center in the region. Let me ask you a question; What makes you think they invented tax evasion? Why do you think they found it necessary to engage in such?

Tax evasion is old as the country itself. Indians had perfected this practice, only that they did not pass the savings to the end-consumers, but instead used the extra earnings to lead opulent lifestyles. The Indian cartels were so entrenched, they could even bribe customs officers to reject the bribes of new businesses. That way they kept a tight control in trade in most goods. Today, many Indian shops have disappeared because they can no longer enjoy the huge margins they were once used to, thanks to Eastleigh businesses. On the upside, most peasants, like you, can afford new clothing.

The Somali community has exploited cultural values to gain an edge in the business world. This ought to be the point of discussion.

Any business that thrives because of tax evasion is not sustainable in the long run… Even these Somalis will suffer the same fate one day… You cannot bank on tax evasion forever as a key competitive strategy. Right now the Walalus have the system in the pocket… One day, someone might refuse their cash… May be…

[cortedivoire]

Siwezimind kuingia dem msomali mkia

[Jimjones]

@cortedivoire

Siwezimind kuingia dem msomali mkia

Wewe na mkia! This is serious stuff!

[upepo]

@Jimjones

Any business that thrives because of tax evasion is not sustainable in the long run

Sustainability is an empty buzzword, especially if you can keep going for 30 to 50 years. The head-start you get is almost unassailable, no matter how the circumstances change.

[Jimjones]

@upepo

Sustainability is an empty buzzword, especially if you can keep going for 30 to 50 years. The head-start you get is almost unassailable, no matter how the circumstances change.

I agree with you on this. I made my wealth before itax and Uhuru, si I could evade taxes… Now it is extremely hard to do so under normal circumstances especially if you receive your income via Bank accounts.

[Obaba]

@Jimjones

I have been in Eastleigh a few times and realized that these fellows sell goods on cash or by M-Pesa withdrawals only… Their prices are normally far much lower than the other shops outside that area which are better documented. Now, they appear to achieve these prices by not paying import duty and also VAT and Income tax. Now, how possible is it to beat these fellows while paying taxes and complying with our laws? Ama one has to just go there and set up similar units and play the game as they do? Does KRA conduct surveillance operations there as they do in town and other areas? Are they protected by some cartels somewhere?

Somalis pay Import duty just like any other Kenyans, I think only electronics products ndio inakuwanga na issue ya tax evasion because hiyo inaingia through eldoret airport. The reason price is cheaper is because hawa huleta vitu mingi wakiwa group therefore low cost. On the mpesa issue ni juu ya reversal

[Jimjones]

@Obaba

Somalis pay Import duty just like any other Kenyans, I think only electronics products ndio inakuwanga na issue ya tax evasion because hiyo inaingia through eldoret airport. The reason price is cheaper is because hawa huleta vitu mingi wakiwa group therefore low cost. On the mpesa issue ni juu ya reversal

When it comes to importing, we can equally compete as it is now the norm to do cargo consolidation… The problem is in domestic taxes (VAT and Income tax)… On M-Pesa, reversal is not a problem if you use Till Number or Paybill… the seller has to approve the reversal… Withdrawal is utilized for tax evasion only…

[Obaba]

@Jimjones

When it comes to importing, we can equally compete as it is now the norm to do cargo consolidation… The problem is in domestic taxes (VAT and Income tax)… On M-Pesa, reversal is not a problem if you use Till Number or Paybill… the seller has to approve the reversal… Withdrawal is utilized for tax evasion only…

Maybe VAT and income tax but import duty is impossible to evade especially for a common man like somali

[Jimjones]

@Obaba

Maybe VAT and income tax but import duty is impossible to evade especially for a common man like somali

This is always evaded when one consolidates cargo and the assessment is based on volumes and not value of goods… Normal import/ Customs duty expects one to produce a detailed manifest of each item and purchase price… this is not the case and therefore in fact it is impossible to prove that one paid anything… the charge by the shipping company is on the weight of the item and not on value… that is where tax evasion is…

[Azor_Ahai]

@x-trail

Even if you are given those goods tax or duty free hauta manage to get successful like them so just stick to your bonobo lanes

:meffi::meffi::meffi:

By the way, I am one of the few people who think Wariahes are overrated. Those people are not as business savvy as people think. Also, most of them are peasants just like everyone else. Hata kwa slums wamejaa. Give Kikuyus that advantage and see them outdo Wariahes in real time. Lastly, pooling of resources makes them appear richer than they really are. Unapata business moja inaserve wariah kumi, na nyumba moja inaishi wariah saba. These guys ain’t shit ni vile tuu they are slightly different in terms of looks, religion, and culture.

[Obaba]

@Jimjones

This is always evaded when one consolidates cargo and the assessment is based on volumes and not value of goods… Normal import/ Customs duty expects one to produce a detailed manifest of each item and purchase price… this is not the case and therefore in fact it is impossible to prove that one paid anything… the charge by the shipping company is on the weight of the item and not on value… that is where tax evasion is…

Yeah that the way, box ikiwa na 1000 items they will understate it to 500, but I thought everyone do that

[Jimjones]

@Obaba

Yeah that the way, box ikiwa na 1000 items they will understate it to 500, but I thought everyone do that

Sure, that is the standard now. But it should not be. That is tax evasion…in fact ask those selling spare parts in town how many times KRA fellows raid their shops asking for proper documentation for the parts… Without a proper bill of lading/ manifest one cannot prove that they paid duty… The only items shipped via the sea are engines and other heavy items which have proper documentation (in fact they have to pay proper duty for these because this document is required while replacing the engine number at NTSA)… Electronics/ computers/ photocopiers/ printers which have serial numbers are also targeted since the serial numbers are required as part of the bill of lading for the payment of taxes… now without proper tax payment proof, attracts KRA fellows like flies on dead meat! And KRA fellows know this loophole… so wanakula proper!

[WazeeNaWatoto]

@Azor Ahai

:meffi::meffi::meffi:

By the way, I am one of the few people who think Wariahes are overrated. Those people are not as business savvy as people think. Also, most of them are peasants just like everyone else. Hata kwa slums wamejaa. Give Kikuyus that advantage and see them outdo Wariahes in real time. Lastly, pooling of resources makes them appear richer than they really are. Unapata business moja inaserve wariah kumi, na nyumba moja inaishi wariah saba. These guys ain’t shit ni vile tuu they are slightly different in terms of looks, religion, and culture.

Bana

I’ve never gotten the hype. They import and resell. Plus Eastleigh ilijengwa by their elite who fled Somalia. It’s like Kenya collapsing and kina wanjohi going to build up a part of London with their loot then claiming to own and control the UK economy from there

[ndume]

They will continue evading taxes and nothing will happen. The reason is KRA officials. Why do you think KRA officers are rich? That is where they collect their rents. Just like it is to get approval from NEMA for anything through corruption, so it is to get KRA certificate/clearance for anything through bribes. Getting them to pay full taxes will close money flow to KRA enforcement officers, that is why it will never happen

[mbwakali]

@Jimjones

Sure, that is the standard now. But it should not be. That is tax evasion…in fact ask those selling spare parts in town how many times KRA fellows raid their shops asking for proper documentation for the parts… Without a proper bill of lading/ manifest one cannot prove that they paid duty… The only items shipped via the sea are engines and other heavy items which have proper documentation (in fact they have to pay proper duty for these because this document is required while replacing the engine number at NTSA)… Electronics/ computers/ photocopiers/ printers which have serial numbers are also targeted since the serial numbers are required as part of the bill of lading for the payment of taxes… now without proper tax payment proof, attracts KRA fellows like flies on dead meat! And KRA fellows know this loophole… so wanakula proper!

Umetumia evasion sana …there’s also tax avoidance which is legal. Their sharia banks and hawalas are very suspect

[Jimjones]

@mbwakali

Umetumia evasion sana …there’s also tax avoidance which is legal. Their sharia banks and hawalas are very suspect

This scenario is simply tax evasion…