Companies

KRA boss accused of graft loses bid to halt tax charges

mumbi

Justice Mumbi Ngugi. FILE PHOTO | NMG

A Kenya Revenue Authority (KRA) manager accused of receiving bribes at the Mombasa port to build a multi-million shilling empire has failed to stop his prosecution over failure to pay taxes.

Joseph Chege Gikonyo and his wife Lucy Kangai Stephen failed to convince Justice Mumbi Ngugi that the charges against them were brought with ulterior motives.

“I am not satisfied that the petitioners have established that their prosecution is actuated by malice on the part of the respondents,” said the judge.

Mr Gikonyo challenged the case against them, arguing that Ethics and Anti-Corruption Commission (EACC) and the Director of Public Prosecutions (DPP) brought the charges after losing an application to forfeit their assets to the State.

The anti-graft agency is still pursuing a bid to seize the couple’s properties worth Sh597 million on claims they were built on bribes paid at Mombasa port.

The man, who with a monthly salary of Sh100,000, had acquired the property in Mombasa, Kilifi, Nairobi and Murang’a.

He defended himself that he acquired the properties through loans from KRA.

The couple and their company Giche Ltd wanted to stop their prosecution over charges of fraudulent failure to pay tax amounting to Sh38.6 million.

But Justice Ngugi dismissed the case, saying there was no evidence to suggest that the actions of the DPP were harmful and needs to be prevented to avoid abuse of the legal process.

The duo and their company Giche Ltd were charged in June with fraudulent failure to pay taxes. They argued that the proceedings relate to non-payment of taxes and the issue is subject to the provisions of the Tax Procedure Act, which bars prosecution where a penalty has been imposed.

They wanted the court to quash the charge sheet, and the State compelled to pay them general damages. They said their company is involved in real estate and farming business.

He argued that EACC had criminalised tax assessments notwithstanding express statutory provisions outlawing prosecution. They argued that the prosecution contravenes section 80(1) of the Tax Procedures Act, which prohibits prosecution whenever penalties are imposed on a taxpayer under any tax law.

Mr Gikonyo said in 2016, the EACC obtained an order freezing his assets and bank accounts, but they challenged it and High Court lifted it after explaining how they acquired the assets. The agency, however, lodged an appeal, which is pending.