Blunder May Cost KRA Ksh2.2B in Kamlesh Pattni Case

  • Businessman Kamlesh Pattni
    Businessman Kamlesh Pattni
    (COURTESY)
  • Kenya Revenue Authority (KRA) risks losing a Ksh2.2 billion case that it is embroiled in with billionaire Kamlesh Pattni.

    A report by Daily Nation on Sunday, April 11, indicated that the taxman had made a mistake in its pursuit of a company that had defaulted up to Ksh2.2 billion in taxes.

    In a statement, KRA admitted that the case was a mix-up when it went after Suzan General Trading Ltd instead of the original Diplomatic Duty-Free Ltd which had defaulted on the tax.

    The taxman was forced to release goods to Suzan at no cost after establishing the blunder but maintained that it would still pursue Diplomatic Duty Free Company.

    KRA offices in Nairobi.
    A file image of the reception area at KRA offices in Nairobi.
    KRA

    "By consent between the parties, the appeal herein is marked as settled... that all goods attached by the respondents and/or their agents/representatives and subject to the said Notice of Distress issued on July 9, 2018 be forthwith released to the appellant at no cost.

    "When this (the mix-up) was established, the most prudent thing was to cease enforcement measures against Suzan General Trading and proceed against Diplomatic Duty Free Limited which is the company owing KRA taxes," read a statement from KRA.

    In 2018, KRA began the process of recovering the taxes from the embattled company and hired Keysian Auctioneers to auction office furniture and fittings owned by Kamlesh Pattni’s Diplomatic Duty Free Limited.

    The tax arrears in question amounted to Ksh784 million and penalties amounting to Ksh1.459 billion.

    When the auctioneers went to the shop, which was located at Jomo Kenyatta International Airport (JKIA), they raided property belonging to Suzan General Trading JLT, which is reportedly associated with Pattni.

    Diplomatic Duty Free limited ran duty-free shops at JKIA until 2013 when the Kenya Airports Authority (KAA) repossessed the space.

    The tax evasion dates back to the same year and relates to alcoholic drinks which Diplomatic Duty Free had in its stores before being evicted from the international airport.

    For now, the whereabouts of Diplomatic Duty Free offices remains unknown with employees of Suzan Company denying any knowledge of the embattled company.

    Pattni converted from Hinduism to Christianity in 2013 and has since been a pastor at Hope International church.

    He unsuccessfully contested for the Westlands Parliamentary seat in 2007 and 2013 general election under Kenya National Democratic Alliance Party (KNDAP).

    Businessman Kamlesh Pattni
    Businessman Kamlesh Pattni
    (COURTESY)
    alcohol tax evasion