KRA busts new scheme to avoid paying VAT

The Kenya Revenue Authority(KRA) has busted a new scheme used by taxpayers to avoid paying Value Added Tax.

KRA in collaboration with the Director of Criminal Investigation and the Office of the Director of Public Prosecutions is pursuing about 200 taxpayers comprising institutions and individuals suspected to have avoided paying VAT.

KRA defines tax evasion as the deliberate choice to evade taxes through various practices including; failure to disclose fully the income they have earned, misstatement of expenses to reduce the taxable income, failure to pay the correct import taxes through concealment of goods, misdeclarations and undervaluation among other schemes, failure to withhold and remit taxes as required by law or any other non-compliance with tax laws.

In the recent past, the taxman has been hot on the heels of potential taxpayers who largely fail to remit the due Value Added Tax in full or part.

KRA has now trained its eyes on over 200 taxpayers who are suspected to have evaded paying VAT by cooking their records to remain in the credit position.
On Tuesday, KRA officials and those from the offices of the Director of Criminal Investigation and the Office of the Director of Public Prosecutions were to make public the new tax evasion scheme involving VAT.

However, this was cancelled at the last minute with members of the media who had gathered for the briefing informed that the report from investigating arms was not ready by then.

Preliminary reports indicated that investigating agencies had finalised probe for 13 companies that are lined up for prosecution on tax evasion charges.

In addition, officials said the new tax evasion scheme for VAT involved a sum of Ksh 1.4 billion in uncollected tax revenue.


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