The Kenya Revenue Authority has heightened its fight against tax evasion by going after 1,309 companies and wealthy individuals who owe the taxman Ksh 259 billion, following President Uhuru Kenyatta's directive to crack the whip on tycoons who commit tax fraud.
KRA Commissioner General Githii Mburu lamented over how unscrupulous individuals and organised crime perpetrators have learned to do business without paying due taxes, leaving the agency no other alternative other than apprehending them.
"We lose money every year and the entities mentioned have been earmarked for further investigations and legal action for non-compliance. To mitigate against these crimes, tax authorities and government agencies dealing in financial investigations have heightened efforts to outsmart the tax cheats," Mburu stated in a notice seen by Kenyans.co,ke.
He added that KRA set out to enhance voluntary compliance and will not tolerate unfair business practices.
If the process to nab the 1,309 tax evaders is executed successfully, it will be the biggest crackdown on high net worth business people.
Some of the illegal schemes conducted that enable them to evade paying taxes are stating fictitious value-added tax (VAT) and faking invoices to inflate purchases of inputs.
KRA identified a trader who had allegedly procured steel worth more than Kshs. 4.8 billion on a cash basis. Curiously, this trader could not avail his cash books when requested to avail the same for perusal.
Transit goods suppliers were accused of dumping cargo and using diversions to beat the system. KRA stated that they always hatch new ways to divert transit cargo into the local market. The dumping/cargo diversion schemes have denied the country much-needed revenue amounting to billions of shillings.
"Fictitious invoices had been generated to depict business transactions but there was hardly any corresponding actual supply or movement of goods and services. The invoices had been generated and sold at a fee by the missing traders to existing companies purposely for use in inflating the cost of sales thereby reducing tax payable," Mburu disclosed.
The agency flagged the rich who live lavish lives by purchasing palatial homes and multi-million worth vehicles but fail to declare their sources of income.
The tycoons face several punishments, from travel bans, asset freeze and deactivation of Personal Identification Numbers (PINs).
Deactivation of pins will see the business people lose privileges such as registration of land titles, approval of development plans, registration and licensing of motor vehicles, registration of business entities, insurance policies, customs clearing and forwarding, supplying goods and services and opening bank accounts.
