KRA obtains orders freezing City Hall CFO bank accounts

The taxman on Wednesday obtained court orders freezing suspended Nairobi County chief finance officer Jimmy Kiamba’s bank accounts, opening a new front in the legal battle over his vast estate.

The High Court granted the orders after the Kenya Revenue Authority (KRA) filed a separate suit against Mr Kiamba, accusing him of failing to fully declare and pay taxes in the last eight years.

The KRA had sought orders to preserve the funds contained in 10 bank accounts associated with Mr Kiamba, who is now prohibited from making any transfers, withdrawals or deposits in the accounts.

Five of the accounts are with CFC Stanbic Bank and two accounts with Co-operative Bank. Mr Kiamba also operates one account each at Standard Chartered Bank, Equity Bank and Gulf African Bank.

The taxman described the amounts held in the said accounts as colossal, adding that there was a likelihood Mr Kiamba would frustrate recovery of the taxes owed if left to move the money.

The KRA claims that between 2007 and 2013 when Mr Kiamba worked for the Nairobi County government as chief finance officer, he has only been declaring employment income in his returns.

The tax regime is based on a self-assessment, which relies on full disclosure by individuals and companies when filing tax returns to the KRA.

READ: City Hall official who lives like a king on Sh85,000 pay

Cyrell Wangunda, a KRA official, said in a sworn affidavit that he had been involved in the tax assessment investigation of Mr Kiamba after the Ethics and Anti-Corruption Commission (EACC) found that the City Hall official had over time accumulated substantial amounts of cash in his accounts as well as several properties that generated substantial income.

The taxman is also targeting eight properties belonging to Mr Kiamba, all valued at Sh366 million.

The list includes two maisonettes at Bandari Villas in Nairobi’s South C estate, each estimated to be worth Sh10.5 million, and three plots on Pritt Lane Courts priced at Sh17.5 million each.

Mr Kiamba also owns properties in Nairobi’s Kileleshwa Estate valued at Sh40 million, another in Runda Water Estate valued at Sh72 million and another in Muthaiga valued at Sh180 million.

“A preliminary finding based on examination of the information and documents availed by the EACC indicate that the respondent has not been complying with the provisions of the Income Tax Act through underpayment,” he said.

KRA claims Mr Kiamba owes Sh98.3 million in unpaid taxes for the financial years 2010 to 2013.

Mr Wangunda says in a sworn affidavit that the sum is exclusive of tax assessments for the financial years 2006 to 2009, which are still being reviewed.

Mr Kiamba, through his lawyer Philip Nyachoti, told Justice Fred Ochieng that a similar application filed  by the corruption watchdog was due this morning before Justice Mbogholi Msagha and asked that the two suits be heard by the same court.

Mr Nyachoti also told the court that his client had commenced negotiations with the taxman over the matter.

KRA’s lawyer, Okello Ogello, said he was not aware of such negotiations and had only seen a letter from Mr Kiamba’s tax auditor that needed further consultation.

The KRA insists that while the case before Justice Msagha was filed under the anti-corruption legislation, its own suit is filed under the Income Tax Act, which is intended to preserve the funds until a full claim is made after assessment.

Justice Ochieng’ ordered the suspended county official to file his response to the taxman’s petition within three days.

This is the second court order freezing Mr Kiamba’s bank accounts, the first having been issued to the EACC for six-months pending investigations into the City Hall official’s vast estate.

The EACC said Mr Kiamba’s estate includes two maisonettes in South C, a plush town house in Kileleshwa, four apartments in Kilimani and eight plots of land in Muthaiga, Mavoko and Machakos. He also owns six cars.

The corruption watchdog claims that Mr Kiamba lives too large for his modest monthly salary of Sh85,000 and that Mr Kiamba acquired the property through fraudulent deals using his position as City Hall CFO.

EACC reported that Mr Kiamba has two bank accounts at CFC Stanbic Bank that were used to transact more than Sh400 million between January and November 2014.
The two accounts held Sh14.2 million when they were frozen.

Justice Msagha in allowing the freezing of the accounts, placed a caveat on the suspended official’s properties, which he co-owns with his wife.

He is this morning expected to decide whether the EACC will get the six months to conclude its investigations.