KRA unearths tax fraud syndicate by a Member of Parliament

PRESS RELEASE 02/07/2019

The Kenya Revenue Authority (KRA) has unearthed a syndicate in which Lamu West MP, Stanley Muthama is alleged to be involved in Kshs. 487 Million worth tax fraud. 

 The MP was arrested by officers from the Directorate of Criminal Investigations (DCI), KRA unit in Eldoret on Thursday 27th June 2019. Mr. Muthama was on Monday 1st July 2019 arraigned in an Eldoret Court, before Chief Magistrate Hon. Obulutsa.

 

As the Director of Stansha Company Limited, the Court read that Mr. Muthama knowingly made an incorrect statement in the company’s Income Tax and VAT returns for the period 2013 to 2017 contrary to Section 97(a) as read with Section 104(3) of the Tax Procedures Act, 2015.

 

“Being registered taxpayers chargeable to tax, within the Republic of Kenya and in receipt of income derived from business activities within Kericho, Kajiado and Nakuru Counties failed to pay tax to wit Corporation Tax, VAT and PAYE of Kshs. 487,914,642, for the tax period 2013 to 2017,” read the charge.

 

The accused was charged with thirteen counts of fraud in relation to tax contrary to section 97(a) as read with Section 104(3) of the Tax Procedures Act, 2015. He pleaded not guilty to all the counts and was released on a Bond of Kshs. 3,000,000 and one surety or a cash bail of Kshs. 500,000.

The company was contracted by Ardhi Water Services Board and The Lake Victoria South Water Services Board for construction of Sewerage and Water Treatment Plant; and CMC DI Ravenna for construction of Itare water dam. The Company under-declared their income thereby evading payment of Kshs. 487,914,642 in Corporation Tax and VAT.

 

If convicted the accused will be liable to pay a fine not exceeding Kshs. 10 Million or double the taxes evaded whichever is higher or to imprisonment for a term not exceeding 10 years or to both. This is in addition to payment of all the taxes not paid.

 

COMMISSIONER FOR INVESTIGATIONS & ENFORCEMENT

 

 

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