Detectives close in on ex-KRA officials in tax evasion ring

Monday, August 19th, 2019 00:00 |
KRA headquarters. Photo/File

Former commissioners and top managers of the Kenya Revenue Authority (KRA) who served between 2014 and 2018 are being investigated for fraud that cost the authority billions of shillings in uncollected tax, People Daily can report.

The Directorate of Criminal Investigations (DCI) boss, George Kinoti, has assembled a multi-agency team to crack the tax evasion racket.

Companies and people at the heart of investigations include a top hotel in Nairobi and companies associated with high-ranking Jubilee party officials, well-connected individuals and current and  former members of the National Assembly.

Sources at the National Treasury told People Daily detectives are out to establish whether some of the commissioners and managers who served under the then Commissioner General John Njiraini may have aided some companies in the big taxpayers category to evade taxes running into billions of shillings.

New commissioner

Kinoti, at the weekend, confirmed that the DCI had formed a team to lead the KRA investigation.

“The team is up and running. Those implicated in stealing from the public will face the music,” he said.

Without giving details, Kinoti said the scheme involved “who-is-who in the country.”

Already, a number of serving managers have recorded statements  and it is believed they may have implicated their seniors.

Sources intimated to People Daily the evasion scheme was first busted by the new Commissioner General James Mburu, who passed the information to Kinoti, Director of Public Prosecutions Noordin Haji and the National Intelligence Service (NIS) boss Major General Philip Kameru. The information was later shared with President Uhuru Kenyatta.

Sources say Mburu is likely to be treated as a whistle blower and a key prosecution witness.

Companies allegedly linked to Jubilee officials are said to have swindled the government an estimated Sh50 billion in revenue.

The amount swindled is said to be enough to fund the 47 counties for one- and-a-half years, fund free primary education for 10 years and is more than enough to build and equip cancer centres in all counties.

The probe, which is said to have the consent of the President, is undertaken by officers from DCI, Ethics and Anti-Corruption Commission, Office of the Director of Public Prosecutions, NIS, Asset Recovery Unit and Attorney General’s office.

NLC candidature

The team, which is led by a Senior Superintendent of Police, held its first joint meeting last Friday. During the meeting, officers from NIS and detectives from the DCI’s cybercrime unit briefed the team on how the scheme operated.

Sources indicate that Njiraini is among those who have recorded statements with the DCI, while others are expected to visit Mazingira House on Kiambu Road, the nerve centre of the probe. 

Ten other former and current KRA managers have been interviewed by the DCI.

Besides Njiraini, other persons of interest are commissioners who  previously served in the Customs and Border Control Department, Domestic Taxes Department and Legal Services and Board Coordination Department.

Two weeks ago, Njiraini withdrew his candidature for National Land Commission chairperson on personal reasons. DCI sources, however, claim he may have been forced to withdraw the candidature after learning about the probe.

Kinoti and Haji are reportedly meeting regularly over the probe, with sources indicating that they are leaving nothing to chance to ensure they build a strong case against the suspects.

The investigators are probing KRA officials suspected of erasing records in the tax computer systems as part of a cover-up to defraud the government.

Detectives, according to sources, have recovered the erased data, a development which has helped them track how the racket was executed for the last five years.

Sources said commissioners and managers authorised their juniors to illegally waive taxes of some big companies, and thereafter delete their records from system.

Reached for comment, acting National Treasury Cabinet secretary Ukur Yattani said: “I have heard detectives are trying to establish a racket involving some officials assisting big companies to evade tax. Let’s wait for the investigations to be finalised.”

KRA has been experiencing difficulties in meeting its revenue targets. For instance, while in the last financial year KRA collected Sh1.44 trillion, which was Sh100 billion more than the previous year, it failed to meet its target. The poor performance has been blamed on tax evasion.

KRA had projected to collect Sh1.605 trillion, a threshold that has been revised downwards from Sh1.69 trillion.

Last week, Mburu disclosed that KRA has watertight cases against individuals who will be prosecuted over tax evasion-related offences, a number that is more than triple those charged last year when 222 individuals were arraigned.

In May this year, more than 80 KRA staff were arrested over tax evasion and money laundering claims.

Out of the officers who were arrested, 62 of them were from the Domestic Taxes Department and 18 were from the Customs and Border Control Department.

Uhuru’s pledge

The probe was led by Mburu, who served in the Tax Administration Department, Domestic Tax, Audit and Investigations, before replacing Njiraini.

Detectives have also busted alleged tax evasion scheme by tycoon Humphrey Kariuki. The businessman, the owner of alcoholic beverage company African Spirits, is accused of evading taxes to the tune of Sh41 billion. Police have been looking for him in Europe after he failed to appear in court.

The onslaught on the tax evaders is part of the ongoing probe of plunder of public money by government officials, a war, which Uhuru insists will go on.

So far this resolve has seen, among other top officials, former Cabinet secretary Henry Rotich, Principal secretaries Kamau Thugge and Susan Koech, as well as Kiambu Governor Ferdinand Waititu charged. 

The President had warned that he would not spare even his relatives in the fight.

“If you are corrupt we will fight you. You can be my brother or my sister or my closest political ally, but if you are corrupt we will fight you,” Uhuru said in March when he met Kenyans living in Namibia.

More on National