Two Nairobi traders have found themselves on the wrong side of the law after they were nabbed in separate but similar tax evasion schemes.
The two reportedly tried to beat the system through the fraudulent use of Kenya Revenue Authority (KRA) Personal Identification Numbers (PINs).
According to KRA, investigations unmasked how the two individuals attempted to manipulate the tax processes by shifting the burden onto other unsuspecting companies.
In the first case, the suspect, a lady, was found to have presented a false KRA PIN to her clearing agent with the hopes of having her imported goods cleared by customs officials without spending a cent in taxes.
The court heard that between May and August 2023, the suspect submitted invoices and Import Declaration Forms as is the norm for any importer. The kicker, however, was that she used another company's PIN, effectively disguising her own tax obligations.
After KRA's investigations, the suspect was charged with causing declarations contrary to Section 203(b) of the East African Community Customs Management Act, 2004.
After denying the charges, she was released on a bond of Ksh500,000. With one surety. Her case has been scheduled for mention on May 12.
In a separate incident but the same modus operandi, a Nairobi-based businessman was charged with using a false KRA PIN to issue Electronic Tax Register (ETR) receipts over a three-year period. His scheme spanned from 2020 to 2023.
Investigations by the taxman led to the discovery that the suspect used a PIN registered to a different entity to facilitate transactions for his company, subsequently masking his own financial activities and shifting tax responsibility to an unrelated company.
After being charged with using a false KRA PIN on a document for purposes of tax law, the suspect denied the charges and was granted a bond of Ksh300,000.
In their statement, KRA affirmed that the crackdown against such tax malpractices, which is incidentally rampant, would go on in the coming weeks, as the nation enters a period typically known as 'tax season', when Kenyans rush to file their taxes.
"KRA’s Investigations & Enforcement Department is actively unearthing tax evasion schemes orchestrated by unscrupulous businesspersons persons to ensure tax compliance and adherence to tax laws and procedures. This will, in turn, promote fair trade competition within the market. Taxpayers are urged to pay their taxes in order to avoid punitive enforcement measures being taken against them, including prosecution," the taxman said in a statement.
