Kenya Revenue Authority Hands 29 Tax Cheats Travel Ban

Kenya Revenue Authority's head office at Times Towers in Nairobi
10 November 2019

The Kenya Revenue Authority (KRA) has issued orders stopping 29 suspected tax cheats from exiting the country, signalling the deployment of new measures to pile pressure on businesses flouting tax regulations.

The 29, 16 Kenyans and 13 foreigners, owe KRA more than Sh9.2 billion, the authority's Commissioner for Investigation and Enforcement David Yego told the Sunday Nation.

"The commissioner has the power to issue Departure Prohibition Orders (DPOs) in respect of taxes collectable as a debt to the government as envisaged under Section 45 of the Tax Procedures Act. DPOs have been instrumental in dealing with taxpayers who are a flight risk," said Mr Yego.

Orders issued under the said section, he added, have the potential to disrupt travel until outstanding taxes are paid or reasonable arrangements are made to ensure that payment is made.

REVOKE ORDERS

"Once this is done, the commissioner may revoke the orders," he said. The renewed crackdown on tax evaders is targeting individuals and organisations that fail to disclose fully the income they have earned, those who misreport expenses with the intention of reducing the taxable income, those who fail to pay the correct import taxes through concealment of goods, false declarations and undervaluation, and failure to withhold and remit taxes as required by law, among others.

KRA Commissioner-General Githii Mburu recently said that he was keen to ensure that "all persons who are required to pay taxes do so for the good of this country".

The DPOs against the 29 were issued on diverse dates between February and November.

TAX EVADERS

The authority issued such orders against 52 Kenyans and 51 foreigners between 2017 and 2018.

Although the KRA estimates that these 29 persons owe the taxman Sh9.2 billion, the exact amount may not be known because "there are instances where investigations are still ongoing or cases are pending before the Tax Appeals Tribunals for determination of taxes due".

The 29 businesses are in diverse sectors, including alcohol and beverage, construction, mobile and computer accessories, sports tourism, manufacturing, and cooking gas distribution.

These sectors regularly account for some of the highest unpaid taxes in recent history. Offenders in the alcohol and beverage sector owe the taxman more than Sh40 billion in unpaid taxes, the construction sector owes over Sh2.5 billion, the mobile and computer accessories Sh2 billion, sports tourism over Sh1 billion, while the manufacturing sector owes more than Sh300 million.

The total tax owed by these five sectors alone is more than Sh46 billion, yet the KRA in October announced that it had lost Sh53 billion in tax evasion in the first three months of the 2019/20 financial year.

DENIED ALLEGATIONS

The taxman has of late been going for suspected tax cheats after it declared the intention to prosecute up to 600 offenders this year, up from 222 in 2018.

In October, businessman Humphrey Kariuki was arrested on claims of tax evasion amounting to more than Sh41 billion by Africa Spirits and Wow Beverages in Thika.

He denied the allegations and the matter is still pending in court. Keroche Breweries founders Tabitha Karanja and her husband Joseph Karanja have also been charged on suspicion of evading taxes amounting to Sh14.4 billion.

They too have denied the allegations. The KRA has also charged businessman Abdi Gedi Amin with tax evasion amounting to Sh1 billion.

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