The taxman has ordered KCB #ticker:KCB, Co-operative #ticker:COOP and Equity #ticker:EQTY banks to pay it Sh322 million from accounts operated by Estama Investments and Business Capital Access Limited, the firms at the centre of the Sh800 million mobile clinics scandal at the Ministry of Health.
The Kenya Revenue Authority (KRA) has written to the three lenders ordering them to make the payments in relation to taxes the firms owe from the controversial Sh800 million tender Estama Investments won to supply mobile clinics to the Ministry of Health.
Details of the agency notices have been revealed in a court application the firms and their owners have filed challenging the taxman’s move, arguing that no assessment on their books of accounts have been done to establish any due revenue.
Estama Investments holds that the taxman has misinterpreted a ruling by Lady Justice Grace Nzioka, which it insists only allowed the KRA to assess how much it is claiming, issue a demand notice to the firms and have the dispute resolved by the Tax Appeals Tribunal.
Agency notices have also been issued to the lenders in respect to personal accounts held by the companies’ owners, Njagi and Irene Makanga.
“There are no court orders authorising KRA to issue the said agency notices. The said notices have been issued based on a deliberate misconception and on erroneous interpretation of the ruling of Justice Grace Nzioka.”
“The said orders did not authorise at all the actions taken by KRA and the same do not authorise KRA to issue agency notices in respect of the respondents’ bank accounts as purported by KRA,” says Philip Nyachoti, Estama’s lawyer.
The firms and their owners in the suit add that if both banks comply with the agency notices, their accounts which hold a total of Sh968 million will be depleted, and recovery of the overpaid amounts will be difficult.
The KRA had initially sued the firms and their owners in January seeking to freeze their accounts. The taxman however dropped the suit two weeks ago after the parties agreed to have the tax dispute resolved at the Tax Appeals Tribunal.
Estama Investments, Business Capital Access and their owners insist that they owe no taxes as they have always been compliant.
But the KRA says they have not paid taxes on the Sh800 million paid for supplying mobile clinics to the Ministry of Health, but has since moved some of the money to secret offshore bank accounts.
The KRA adds that Estama has not filed any tax returns nor paid a single cent in taxes since its formation in 2008.
Estama in its response held that the KRA audited its books of accounts in May last year and only found it to be in arrears of Sh1.1 million that was paid in full.