Six directors of a company dealing in the lucrative motorcycles (boda boda) trade within Marsabit County were on Wednesday arrested for tax evasion relating to fraud amounting to KSh698 million.
In a statement signed by Commissioner, Investigation and Enforcement Department David Yego, the Kenya Revenue Authority (KRA) said that Ali Ibrahim Dida, Hassannoor Adan Ali, Kose Isatu Hirbo and Ibrahim Worku 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.
Hirbo, Wako Bate Hirbo and Abdullahi Mamo Jillo were also arrested. The six are all directors of Northern Auto Dealers Limited.
“The company deals in buying and selling of motorcycles within Moyale Town and despite making sales amounting to Kshs 3,420,942,711 between 2016 and 2019, the business failed to declare the income earned nor pay the requisite taxes for both VAT and Corporation Tax,” KRA said in a statement.
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 or double the tax evaded whichever is higher or to imprisonment for a term not exceeding ten (10) years, or both.
“Kenya Revenue Authority (KRA) has aggressively embarked on eliminating tax evasion in the country which has led to several arrests and prosecutions that have resulted to the unearthing of over KShs60 billion worth of taxes evaded which KRA is in the process of recovering,” added the revenue authority.
In Nairobi, two contractors were on Wednesday morning charged before the Milimani Court Chief Magistrate Kennedy Cheruiyot with several counts of tax evasion amounting to Ksh35.7 million.
The two contractors; Yussuf Khalif Bulle and Abdirahim Osman Yarrow, both directors of El-Yumo Contractors Limited, jointly faced eleven counts that involve failure to pay taxes, falsifying accounts statements to reduce tax liability and failure to file tax returns incidents which all happened between 2014 and 2018.
According to 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.