Two contractors were yesterday charged before the Milimani Court Chief Magistrate Hon. Kennedy Cheruiyot with several counts of tax evasion amounting to KSh35.7 million ($0.345 million).
The two contractors; Yussuf Khalif Bulle and Abdirahim Osman Yarrow, both directors of El-Yumo Contractors Limited, jointly faced eleven counts which involve failure to pay taxes, falsifying accounts statements to reduce tax liability and failure to file tax returns all happening between 2014 and 2018.
According to a statement from the country’s revenue Authority, Kenya Revenue Authority (KRA), the accused, in their statements, deliberately failed to declare taxable income by filing nil returns and also failed to declare the correct amounts of taxable income to reduce Value Added Tax (VAT) liability for various years of income.
The two had been awarded contracts by the Judiciary and Kenya Urban Road Authority to construct Mandera Law Courts and routine maintenance of lot 5Y roads in Dandora and Kariobangi area respectively.
Recently, KRA has aggressively embarked on eliminating tax evasion in the country. This has led to several arrests and prosecutions that have resulted to unearthing of over Ksh60 billion ($581.29 million) worth of taxes evaded which KRA is in the process of recovering. Some of the tax evasion cases include those of failure by taxpayers to pay duty, fraud in relation to tax, failure to submit tax returns by due date amongst others.
Meanwhile six directors of a company dealing in the lucrative motorcycles (boda boda) trade within Marsabit County have also been arrested for tax evasion related frauds amounting to Ksh698 million ($$6.76 million. Ali Ibrahim Dida, Hassannoor Adan Ali, Kose Isatu Hirbo, Ibrahim Worku Hirbo, Wako Bate Hirbo, Abdullahi Mamo Jillo, all directors of Northern Auto Dealers Limited were arrested after they failed to declare income earned for the period between the years 2016-2019 from the returns filed on behalf of the company.
The company is dealing in buying and selling of motor cycles within Moyale Town and despite making sales amounting to Kshs 3,420,942,711 ($$33.14 million) (between 2016 and 2019, the business failed to declare the income earned nor pay the requisite taxes for both VAT and Corporation Tax.
Failure to declare taxable income is a tax fraud under section 97 (a) as read with section 104 (3) of the Tax Procedures Act. The suspects are currently held at the Nyeri Police Station and will be charged at the Nyeri Law Courts on 31st October 2019.
If convicted, the accused will be liable to a fine not exceeding Ksh10 million ($0.096 dollars) or double the tax evaded whichever is higher or to imprisonment for a term not exceeding ten (10) years, or both.
The taxman has aggressively embarked on eliminating tax evasion in the country which has led to several arrests and prosecutions that have resulted to unearthing of over Ksh60 billion ($581.07 million) worth of taxes evaded which KRA is in the process of recovering.
Kenya’s taxpayers are encouraged to pay their taxes in time and remain compliant with tax laws in order to avoid punitive enforcement measures including prosecution.