800 individuals, firm bosses under tax evasion probe

The taxman is targeting companies and their directors that exhibited wealth growth but paid nearly the same amount of tax over a period of time.

Kenya Revenue Authority (KRA) Commissioner in charge of Tax Investigation David Yego said Kenya and partner East Africa states will soon launch joint investigations to establish evidence of illicit cash flows to facilitate prosecution of tax cheats.

Mr Yego said scrutiny of individual and company data sourced from government as well as banks on motor vehicle, land and buildings acquisitions, bank transactions including quantity of imports, will help KRA zero in on culprits.

“Expect to see up to 800 individuals and company directors before court by year end as we have enhanced our capacity to investigate the crimes including intelligence sharing among tax authorities from across East Africa,” he said.

Acting Commissioner in-charge of Intelligence and Strategic Operations Terra Saidimu said KRA was scrutinising official data to inform investigation on financial soundness of individuals and companies.

“Some companies increased imports of raw materials, but hardly disclosed the value of their overall sales leading to reduce payment of taxes. Bank transactions show robustness of company activities but there is no trickledown effect indicating an increase in taxes paid,” said Dr Saidimu.

Mr Yego said 118 Kenyans were in court facing tax-related crimes with a tax potential of Sh53 billion.

The two spoke in Nairobi Thursday during the East Africa Revenue Authority Commissioners of Tax Investigation Conference.

Among those arrested include owners of Keroche Breweries, Ms Tabitha Karanja and her husband Joseph Karanja who allegedly failed to pay Sh14 billion in taxes. Billionaire businessman Humphrey Kariuki was charged with withholding Sh40 billion from the taxman.

The ongoing crackdown follows KRA’s shortfall in collections by Sh25 billion for the financial year ending June against a projected Sh1.605 trillion with the government realising Sh1.58 trillion.

The tax forum also attended by tax enforcement officials from Rwanda and Burundi heard that whistle-blowers who helped the government nab tax cheats were enjoying a five percent reward on every verifiable tax evasion information availed with KRA committing to permanently concealing their information.

“Several Kenyans have benefited from this kitty and we have widened our net to investigate tax cheats by sending out tax intelligence teams to gather sales data,” said Dr Saidimu.