23 July 2014

Kenya: Kingsway Tyres Sued Over Sh2.4 Billion Tax Arrears

KINGSWAY Tyres has been sued over Sh2.4 billion tax arrears. Activists Okiya Omtatah and Mohamed Ahmed yesterday said the amount is mind boggling and needs judicial action for its recovery.

In the suit filed under a certificate of urgency before High Court judge Isaac Lenaola, the two said they had acquired documents providing incontrovertible and conclusive evidence that a number of respondents including the Kenya Revenue Authority have colluded to defeat public interest in the recovery of the money.

KRA board of directors has been named as the first respondent while Kingsway Tyres and Auto Mart Ltd is the second respondent. KRA has been named as an interested party.

Others named in the suit are Kingsway Tyres Ltd, Ethics and Anti-Corruption Commission, the Director of Public Prosecutions, CID director, KRA director general John Njiraini, former KRA head Michael Waweru, EACC boss Mumo Matemu, Kisumu Governor Jack Ranguma, Speedman Commercial Agencies and the AG.

In a sworn affidavit, Omtatah said the suit raises substantial questions of constitutionalism, the rule of law, integrity and failure by KRA to recover the Sh2.4 billion.

He said on may 16, 2007 in suit No 1288 of 2004, the High Court allowed KRA to collect the tax arrears from Kingsway Tyres and Auto Mart Ltd. However, to date and in circumstances that point to collusion to evade tax, the money remains uncollected.

"As at April 2012, the tax arrears was Sh3 billion. There are whistleblower allegations to the effect that some Sh900 million was paid by Kingsway Tyres and Auto Mart Ltd to KRA board of directors, Njiraini, Waweru, Matemu, Ranguma and Speedman Commercial Agencies," Omtatah said.

He said Kingsway Tyres and Auto Mart Ltd with an outstanding tax arrears of Sh2.4 billion had irregularly changed its name to Kingsway Tyres Ltd and acquired a new pin, enabling it to enjoy a clean tax compliance status. "The 12th respondent (AG) should disclose the directors and the registered address of the second and third respondents," Omtatah said.

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