Businessman Keval Kumar Charged For Evading Tax Amounting To Sh15 Billion

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Businessman Keval Kumar was on Thursday charged at the Makadara Chief Magistrates Court for evading tax amounting to Sh 15 billion.

Keval kumar was accused of defrauding or aiding the defrauding of approximately Sh2,459,121,896 in VAT and a further Sh4,610,853,556.80 in income taxes.

KRA Director General John Njiraini said in a statement the suspect was arrested after it was discovered that he had registered more than nine business names and made fictitious invoicing in excess of Sh15.3 billion.

“Officers from KRA Investigations and Enforcement Department conducted a search on the residential premises of the suspect on April 4, and confiscated crucial documents and electronic devices including ten ETR machines,” Njiraini said.

He said the suspect had been under surveillance for sometime prior to their arrest.court

Kumar faces up to ten years in jail if found guilty or a fine of double the amount of taxes he tried to evade.

According to Njiraini, the case is among of many others in the elaborate tax evasion racket that KRA has been investigating for over a year.

It involves traders who make fraudulent purchases and evade paying billions of shillings in taxes.

A group of individuals register several fictitious businesses then make non-existent invoices for goods and services that were never delivered.

“The invoices are generated and sold at a fee by the missing traders to existing companies purposely for use in inflating the cost of sales thereby reducing tax payable,” Njiraini said.

He said KRA is investigating approximately 66 missing traders and over 2,000 beneficiaries of the scheme.

“Investigations have been extended to those taxpayers who benefited from the scheme and taxes lost recovered through the relevant provisions of the tax laws. Prosecution of culpable individuals will also continue.”

According to Njiraini, the major companies involved in the syndicate are those in the construction sector, hardware and household goods imports, scrap metal dealers and importers of electronic items such as mobile phones.

The tax-man said some companies import goods but under-declare the imports in order to pay less import duty and VAT.

In order to claim Input VAT the companies’ then resort to buying invoices to inflate purchases, making purchases almost equal to sales thereby resulting into minimal VAT being paid, he said.

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