The Kenya Revenue Authority (KRA) detectives are investigating a Nairobi based firm over alleged tax evasion amounting to Sh61million, The Informer has learnt. The firm is also riddled with shareholding fraud after one shareholder defrauded family of his partner following his demise.
In an intricate web of fraud, Factual Films (1974) Limited is on the verge of collapse after family of the foreign partner prepares to formally lodge a law suit to have them compensated all the income compounded with cumulative interest spanning several decades.
According to a probe report by the KRA Investigations and Enforcement Department, Factual Films (1974) Limited failed to remit the requisite taxes in a span of five years on various transactions.
The investigations report shows massive discrepancies in Value Added Tax computation and variance of declared turnover within the same period.
“We refer to the tax investigation conducted by the authority on Factual Films (1974) Limited. An analysis was performed on the turnover declared by the factual Films (1974) Limited in 2012-2016 vis-à-vis the turnover reported in the sales ledger and we noted some variances,” the letter reference number P000607852D authored by KRA head of investigations E K Karanja reads in part.
Investigators have flagged a total of 161 invoices generated by the firm under investigations which revealed unpaid tax dues amounting to Sh61, 697,761. “Please provide any new evidence for consideration within ten working days from the date of this letter, failure to which default assessments shall be raised without further reference to you,” the letter adds in part.
KRA Commissioner General John Njiraini has initiated punitive penalties for tax avoiders targeting corporate institutions and business firms. In June this year, Njiraini reported a massive breakthrough on the war against tax evasion after a multi-agency task force yielded close to Sh2 billion since March 2015. The multi-agency team is also investigating another thirty cases involving corruption and economic crimes.
All the cases under investigations are at different stages of being resolved through the Alternative Dispute Resolution framework and recovery of assets. Members of the task force include the National Police Service, Office of the Director of Public Prosecutions, Ethics and Anti-Corruption Commission, Assets Recovery Agency, Financial Reporting Centre, among others.
Late last month, Njiraini launched the African Academy Programme for Tax and Financial Crime Investigation in Nairobi. The programme, in partnership with the Organisation for Co-operation and Development that saw at least 27 officers from KRA and other institutions that deal with tax and financial crime trained.