Connect with us

News

‪Tecno Rocked With Over Sh400B Tax Evasion, Racism and Poor Pay Allegations In Kenya‬

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.

Published

on

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.

For weeks now, 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 hundreds of billions.

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.

Advertisement

“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.

Ruto on rogue KRA officials

Advertisement

Previously and in what could be related to the Tecno’s case, President William Ruto in May 26, 2023 tore into KRA over what he considered its failure to properly execute its mandate, accusing staff at the authority of costing the government crucial revenue and facilitating leakages.

The President described KRA’s performance as ‘lackluster’ as he demanded changes.

“The tax base remains far short of its full potential,” he stated.

“I must tell you. Collusion, wanton bribe-taking and general corruption continue to pervade operations of KRA. There are many people who are encouraged and facilitated by KRA staff not to pay tax, and you know what I am saying is true,” Ruto observed.

Related Content:  5 Important Questions You Must Ask Prior to Any Social Media Campaign

The President maintained that the authority needed to craft a new image to boost public confidence.

Advertisement

He stated that many officials at KRA did not work for the State, but rather for themselves and the entities seeking to evade taxes.

“If we ask Kenyans to step forward and name the people who help them to evade tax, I don’t know how many staff members will remain at KRA,” a tough-talking Ruto stated.

Ruto particularly claimed that individuals in KRA had been compromised by betting firms looking to evade taxes. He stated that the integration of betting companies’ systems with mobile money platforms and KRA had resulted in increased collection.

“Those people who do betting, they pay staff at KRA, and you know they do, so that they don’t have to pay all the taxes that are due to the Government of Kenya. So I asked, why don’t we digitize…We did that, and the numbers that are being paid by our betting companies has changed.”

Accusations against Tecno

Advertisement

Tecno, a major player in Kenya’s mobile phone market, has been exposed for tax evasion and workers’ oppression.

Despite not being listed among Kenya’s top tax-paying companies, Tecno allocates a significant Kshs. 3 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.

Advertisement

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 Sh30 million daily transactions, where marketing and brand managers look for kickbacks.

Related Content:  1000 Ways To Die In Kenya: Govt Recalls 7 Peanut Butter Brands Over Cancer-Linked Aflatoxin

Staff oppression

There are reports that the Chinese employees at the firm are paid better than the locals a clear cut that has raised discrimination concerns.

Transsion is facing internal tensions with Kenyan employees due to ongoing harassment and a decline in morale.

Advertisement

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 Anne Mwangi 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.

Advertisement

Tecno management is yet to issue a statement in the face of the serious allegations against the company that also run Carlcare 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.

Related Content:  Why President Trump Will Ban TikTok From The US

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.

Advertisement

Racism

The Chinese expatriate-run low-end mobile phone firm were said to be ‘racist’ and anti-Kenyan staff.

In a complaint filed against the firm published by blogger Cyprian Nyakundi on X (former Twitter) platform.

“Hi Nyakundi. I am Zack was recently dismissed from Tecno under Carlcare. Worked for 10 years and never received even a warning letter but was dismissed like a dog without my years of service and without proper reasons for dismissal.

“These companies are taking Africans for granted, whereby we bring money to the company and later are treated as trash. Received my P9 form recently with lots of months which were not paid for yet deductions were made from my payslip last year. Kindly help push the government to help find justice for us”, screamed one of the complainants.

Advertisement

“Did my internship over there and I swear heri upelekwe hamas vita than there…I was a software engineer/administrator.with first class honours and additional certs from moringa school.I knew my credentials meant nothing the day joseph sent me to pick his trousers river road


Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news TIPS, story angles, human interest stories, drop us an email on [email protected] or via Telegram
Advertisement
Advertisement
Advertisement

Facebook

Most Popular