KRA arrests economic criminals evading with Ksh.64m

Related imageEarly October, President Uhuru Kenyatta sent a stern warning to tax evaders in the country. The President stated that those found culpable of evading tax must face the full consequences of the law.

“The law must reflect the seriousness of tax collection and the consequences of default, there should be no room for tax evaders to thrive in Kenya, criminal cartels like those smuggling imported taxable goods through our ports of entry ought to be easily detected and contained in the shortest time possible,” noted the President.

The presidential directive that Kenya Revenue Authority renews the drive to catch tax evaders appears to have gathered momentum after several individuals were arrested on Saturday for not paying their dues to the State.

More arrests are expected to be made in the coming days as Director of Public Prosecutions Noordin Haji directed that 18 individuals be charged with various offences relating to evasion and avoidance of tax payment which has over time led to perennial shortfall in KRA collections.Related image

Among those facing the fresh charges include former Kenya Bureau of Standards chief executive Charles Ongwae and former director of Quality Assurance Eric Kiptoo.

This comes against the backdrop of pressure for the government to pay its rising debts and fund its many projects as President Kenyatta’s second and final term in office gets under way.

In a statement, Mr Haji said two importers — Gendipe Enterprises and Rupai Trading Ltd and their clearing agent Landmark Freight Services Ltd — concealed imported goods with the aim of evading taxes and reducing amount of penalties payable for goods arriving without certificate of conformity from the country of origin.Image result for kra tax evaders

Investigations established that the two companies imported goods from Dubai which were declared to be imported machinery whose payable taxes are between 0-10 per cent.

But after re-verification of the containers, it was established they contained cooking oil and assorted dutiable goods whose import taxes range from 25-35 per cent of the total custom value.

According to Mr Haji, valuation confirmed that the actual taxes payable by Gendipe Enterprises and Rupai Trading Ltd were Sh7.1 million and Sh52 million, respectively.

“Further it was established that Gendipe Enterprises paid a penalty of Sh148,816 instead of the required Sh4.4 million while Rupai Trading Ltd paid a Sh148,300 penalty instead of Sh4.4 million,” DPP Haji said.Image result for kra tax evaders“In general, the country lost a total of Sh64, 944,112 that would have been received as revenue,” he continued.

The Tax Procedures Act says it is a crime for anyone to knowingly omit certain details when filing their tax returns. KRA acts by either suing the person or taking them to court for criminal trial.

KRA missed its revenue collection target for the 2017-2018 financial year by Sh172.4 billion.

It collected Sh1.48 trillion against a target of Sh1.65 trillion and last hit its collection target in the 2010-2011 financial year, when the then President Mwai Kibaki was nearing the end of his second term.

The taxman is banking on automated technology and corroboration with other law enforcement agencies to eliminate fraud that has cost the government billions of shillings in lost revenue.

Some of the new technologies that have been introduced include an Integrated Scanner Command Centre which enables KRA officers from Nairobi to easily verify the kind of goods being imported into and exported out of the country.

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