Kenya Revenue Authority headquarters at Times Tower in Nairobi. Finance Minister Njeru Githae said KRA had traced a property which it has put up for auction to recover the money. Photo/File
The Kenya Revenue Authority is pursuing Kingsway Tyres and Automart Limited to recover more than Sh3 billion in tax arrears even after the companies transferred their assets to a new company.
Finance Minister Njeru Githae said KRA had traced a property which it has put up for auction to recover the money.
The minister said changes will be made in the Finance Bill 2012/13 to propose taxation measures to curb evasion by corporate entities .
“I will amend the Income Tax Act to provide that where in the opinion of the commissioner- general a limited company has transferred assets to another to evade paying taxes, the directors remain liable for the unpaid dues,” Mr Githae told the Public Accounts Committee.
He said KRA was also targetting a property which it claims was transferred to another party even after its initial transfer to Kingsway Limited which is tax compliant.
“We suspect that there may have been collusion because the two companies are separate under the law,” Mr Githae told the committee chaired by Ikolomani MP Bony Khalwale.
Dr Khalwale had accused former KRA commissioner in charge of legal services, Mumo Matemu, commissioner of taxes—now Commissioner -General John Njiraini and retired Commissioner-General Michael Waweru of deliberately failing to collect taxes from Kingsway Tyres and Auto Mart.
He had asked the minister to state whether Kingsway Tyres and Automart owed KRA Sh2. 6billion and Sh270.07 million in uncollected income tax VAT respectively as of April 30, this year.
Dr Khalwale also claimed that Kingsway Tyres and Automart were still trading under a new corporate identity.
“The company is associated with the Nakumatt chain of stores and the closed down Charterhouse Bank. They changed the name but operate from the same LR number, same business, same directors and there is no reason for KRA not to collect the taxes,” he said.
The minister said KRA failed to collect the taxes from the company from 2003 due to lack of funds in Kingsway’s officially operated accounts and court orders restraining the authority from doing so in 2004.
“The company in question is dead with no known assets but we are piecing together evidence to trace its property ,” he said as MPs exerted pressure on him to charge the directors for tax evasion. [email protected]
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