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KRA manager and his wife charged with tax evasion

tax

Mr Joseph Chege Gikonyo and his wife Lucy Kangai Stephen, who are co-directors of Giche Limited at Milimani law courts on Tuesday, June 30, 2020. PHOTO | DENNIS ONSONGO | NMG

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Summary

  • The couple, who are both directors of Gichie Limited, were accused of failing to remit Sh38,692,694 to KRA.
  • EACC detectives arrested the accused from their Mombasa residence and drove them to Nairobi to face trial.
  • The two have applied for their release on reasonable bail terms.

A senior Kenya Revenue Authority (KRA) manager and his wife were Tuesday charged at the Anti-Corruption Court with evading taxes amounting to Sh38.6 million.

Joseph Chege Gikonyo, an assistant KRA manager, his wife Lucy Kangai Stephen and their company, Gichie Limited, denied the charge before Chief Magistrate Lawrence Mugambi.

The couple, who are both directors of Gichie Limited, were accused of failing to remit Sh38,692,694 to KRA, arising from their company’s taxable income as well as accrued penalties.

Applying for their release on bond, defence lawyers Abbas Esmail and Gibson Kimani argued that their prosecution was an abuse of the court process because the two had been paying the arrears claimed by KRA.

“Mr Gikonyo is an assistant manager with KRA, but is on interdiction,” Mr Esmail told the court.

He said that the issues that led to his interdiction had been resolved by High Court judge Joseph Sergon in 2016 when the Ethics and Anti-Corruption Commission (EACC) froze the bank accounts of the accused and close to five properties.

In September 2016, the magistrate heard, the High Court had discharged those freezing orders.

“The High Court made an emphatic finding that the accused had satisfactorily explained how he had acquired the properties, which are owned by Gichie Limited,” Mr Esmail said.

The court heard that EACC had further commenced another case under the Anti-Corruption and Economic Crimes Act (ACECA) in 2018 which was determined by Justice Hedwig Ong’udi.

“The two High Court judges have pronounced themselves about the issues which KRA has been pursuing with Gichie Limited over tax,” Mr Esmail told the court.

He submitted that the issues of tax evasion had nothing to do with the graft case that the couple is facing now. He said that Section 80 of the Tax Procedures Act, 2015, prohibits prosecution when assessment of tax has been issued and penalties are levied against a taxpayer.

Mr Esmail said the amounts contained in the charge sheet are the same as the demands made to the company by KRA.

“Mr Gikonyo is an assistant manager who was interdicted on grounds that EACC was investigating his unexplained wealth,” he said.

The court heard that EACC has relentlessly investigated Mr Gikonyo, but has lost twice at the High Court.

EACC detectives arrested the accused from their Mombasa residence and drove them to Nairobi to face trial. The two have applied for their release on reasonable bail terms.

State prosecutor Annette Wangia exonerated KRA from blame, saying the issues of the freezing of the accounts had been dealt with.

“The matter pending in court has nothing to do with the case before court, which is for failing to pay tax,” Ms Wangia submitted.