Reports are surfacing about widespread tax evasion and questionable labor practices involving Transsion Holdings, the Chinese company behind popular phone brands TECNO, Infinix, itel, and smart accessories brand oraimo.
Transsion, which has operated in Kenya for over a decade, is now under scrutiny following allegations that it has avoided taxes totaling over Ksh.400 billion.
These allegations, coupled with accusations of smuggling undocumented Chinese workers and labor rights violations, paint a troubling picture of the company’s operations in Kenya.
According to whistleblowers, Transsion Kenya has allegedly been working with corrupt Kenya Revenue Authority (KRA) officials to circumvent tax obligations.
These whistleblowers, including some employees, have stated that many workers are paid in cash, which raises significant concerns about undeclared income and tax evasion.
Investigations reveal that KRA officials reportedly collect bribes weekly at Cardinal Otunga Plaza, turning a blind eye to potential misconduct by TECNO Kenya and its affiliates.
The alleged tax evasion scheme, dubbed “private tax” by insiders, supposedly involves certain KRA officials receiving payments from Transsion representatives.
These payments, whistleblowers claim, are meant to protect Transsion and its affiliates from scrutiny and to facilitate continued tax evasion.
Blogger Nyakundi has been vocal about the issue, reporting that KRA officials have met with representatives of Transsion, including TECNO’s country manager Ray Fang, to offer protection against potential investigations.
Nyakundi further highlighted that “the Tecno and all Transion affiliates’ tax evasion is shocking,” stressing that the company’s alleged tax avoidance could exceed Ksh.400 billion.
Despite these serious allegations, TECNO and its affiliates remain conspicuously absent from Kenya’s list of top tax-paying companies.
The company allocates a substantial annual marketing budget of approximately Ksh.3-4 billion in Kenya.
This large marketing spend raises questions about the disparity between the company’s visible market presence and its tax contributions, or lack thereof.Further compounding the issue, a separate entity, Market Dimensions Limited, has reportedly served as a Human Resource service provider to Transsion.
Whistleblowers allege that this firm may play a role in the broader tax evasion scheme by facilitating undocumented payments and questionable employment practices, providing another layer of opacity in Transsion’s operations in Kenya.
The allegations of “private tax” arrangements and rogue KRA officers accepting bribes to protect Transsion’s interests from regulatory oversight raise profound concerns.
Tax evasion not only robs the Kenyan government of essential revenue but also disadvantages local businesses that adhere to tax regulations.
Observers note that unchecked corruption and tax evasion could deter legitimate foreign investors from entering Kenya, harming the country’s economy and reputation.
These revelations demand a thorough investigation by relevant Kenyan authorities.
There is growing public demand for transparency and accountability from both Transsion and the KRA, with the aim of ensuring fair taxation practices for all businesses operating in Kenya.
If the allegations hold true, it is critical that corrective measures are taken to address the tax evasion and labor issues to uphold the rule of law.
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