A former junior employee at the National Treasury who earned Sh16,000 month but made Sh664 million has been slapped with a Sh313 million tax demand by the Kenya Revenue Authority (KRA).
Mr Elvine Leware Macager ran 16 companies that cumulatively received Sh664 million between 2010 and 2016, mostly through bank transfers.
KRA issued Macager, 38, with a notice of assessment in June and gave him 30 days to respond to the tax demand.
The breakdown of the tax demand is as follows: VAT (Sh108 million), Income tax (Sh199 million), Pay As You Earn (Sh5 million) and capital gains Sh700,000 for a piece of land he sold in Ruiru in 2016 for Sh14 million.
According to KRA, the businessman earned a salary of Sh16,772 monthly at the National Treasury but investigations showed he did not file tax returns for the multiple companies that did business with government raking in millions of shillings.
The bulk of the payments are for between 2014 and 2017. Macager resigned last year after 14 years at Treasury.
KRA in documents seen by The Standard said no purchases have been established for the businesses under review. The firms were mostly paid for consultancy services.
Among the areas the firms provided consultancy service was at the State department of water and regional authorities.
According to the taxman’s analysis, Macager, in September 2014 trading under Beachetts Services received Sh27.8 million for consultancy services he provided for the construction of an abattoir.
Between April and December 2014, Sh103.3 million was wired to his bank accounts for consultancy on veterinary and construction his company offered.
Of this, Sh27 million was not captured in the Integrated Financial Management Information System (IFMIS) electronic procurement system, which is used to pay for services rendered.
In October 2014, trading with Ndegwil Insights and Services, Macager, was paid Sh42.5 million for consultancy services on resource utilisation.
This was a second payment, the first one of Sh19.6 million having been made to his account in July 2014. This payment too was not captured in IFMIS.
Raised questions
This has also raised questions on effectiveness of IFMIS in government with the investigators probing how many more transactions are not captured.
Using Endlevel Services, Macager provided consultancy services on youth employment at Sh38 million and Sh43 million was paid for poverty mitigation consultancy under Vilekat Information in November 2014.
In March 2015, Endlevel Services received Sh29.3 million while Vilekat received Sh43.1 million for consultancy.
Officials say the services are not elaborated.
In November 2014, Macager’s company identified as Waveline Consultancy received Sh22.9 million for consultancy services on best practices on RDAs and in March 2015 he received a further Sh33.6 million for consultancy that is not elaborated.
Investigations show Machira Limited, a company the former Treasury staffer incorporated in September 2014 received Sh35 million for Kimira – Oluch Smallhaolder Farm Improvement Project (KOSFIP) in Karachuonyo and Rangwe in Homa Bay County.
Some Sh10.6 million was received in November.
KOSIFP is a multi-billion project being implemented in Karachuonyo and Rangwe Constituencies with irrigation infrastructure for 1,474 hectares of land for food security and income generation under the Ministry of East African Community and Regional Development.
Officials say their investigations have shown Macager invoiced a payment of Sh35.9 million for consultancy services on recycling of industrial waste in North Eastern Kenya using Inktrauss Global Limited in June 2015. It is not clear if the payment was made.
Olympics expenses
The firm further received Sh15.5 million for Rio Olympics expenses in June 2016 and Sh8.6 million for air travel expenses from the State department of sports development.
An audit of his lifestyle shows Macager bought a block of apartments, luxury vehicles and toured Dubai.
He also bought two trailers and three prime movers, which he currently runs.“These assets represent less than Sh100 million of the Sh600 million he received. It is not clear who received the rest,” states a brief seen by The Standard.
Macager runs three bank accounts.
He did not respond to our queries regarding the tax claims against him. He promised to call back but did not.
Instead, he sent an emissary saying his bank accounts had been frozen and he had been grounded.
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