The Kenya Revenue Authority (KRA) has over the years battled phantom traders registered as taxpayers in its iTax system who file fictitious invoices to deny the government the much-needed revenue.
These phantom traders, popularly known as ‘missing traders’, are a form of tax fraud syndicate where a taxpayer uses several registered business names for fictitious invoicing. In a missing trader scheme, fictitious invoices are generated to depict a business transaction whereas there is no actual supply or movement of goods and services. The invoices are generated to inflate the cost of sales thereby reducing tax payable.
