KRA seeks prosecution of 600 over Sh15bn lost to tax evasion

The Kenya Revenue Authority (KRA) targets prosecuting up to 600 tax cheats by June next year in an ambitious crackdown in efforts to claw back Sh15 billion in revenue.

Some 50 police officers from the Directorate of Criminal Investigations (DCI) have been seconded to the Time Tower-headquartered tax agency to help with investigations as well as 11 prosecutors, the KRA said on Wednesday.

Deputy Commissioner for Enforcement and Investigations Edward Karanja said the taxman has shifted focus from revenue recovery to prosecution, buoyed by intelligence on tax evasion rackets.

Revenue collections will be limited to plea bargain at the courts, he said.

“We have a lot of information about what people are doing out there, and that’s why we are focusing on what we are calling prosecution-led enforcement because we have the evidence already,” Dr Karanja said.

“For example, if you deliberately open a separate bank account and deposit money there, but in your self-assessment return, you decide not to put it and then you go and manufacture invoices. We want to tell you that we know clearly what you have supplied.”

The KRA, he warned, will go after everybody suspected to be involved in tax evasion schemes, including family members and friends.

In the financial year ended June 2019, the KRA filed 222 cases in court with a potential to recover Sh13 billion in revenue, one case short of 223 a year earlier that had a tax implication to the tune of Sh14.1 billion.

Enforcement and Investigations Department of the KRA said 26 of the 29 cases determined between July 2018 and June 2019 were in favour of the taxman, helping it to recover Sh8.53 billion out of the Sh10 billion targeted. In the year through June 2018, the KRA won nine of the 10 cases, which the courts ruled on, clawing back Sh5.29 billion in revenue which surpassed the Sh5 billion target.

KRA commissioner-general James Mburu on Tuesday met the Chief Justice David Maraga for talks over establishment of special courts for tax matters in a bid to determination faster.