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Compel taxman to release fraud report, says importer – Business Daily

KRA commissioner-general Githii Mburu. PHOTO | DIANA NGILA | NMG
An importer of household goods at the centre of a Sh472 million tax claim has asked the court to force the Kenya Revenue Authority (KRA) to release an investigation report implicating the firm of issuing bogus invoices to claim illegal tax refunds.
Pearl Industries Ltd filed the case before the High Court, accusing the taxman of refusing to release the report so that it can fight claims of being an accomplice or a beneficiary of an illegal VAT refund scheme.
The company also says it wants to use the report to defend itself as it appeals against Sh472 million tax arrears demanded by KRA.
“The urgency of the matter is that the petitioner requires the evidence to defend themselves from tax claims, prosecute any wrongdoings within its system, enforce their rights to liberty and property and exonerate themselves from various investigations agencies,” the company says in the petition.
The taxman had rejected some of the manufacturer’s purchases and claims of input VAT by alleging that no purchases were done. According to KRA, some of the company’s suppliers were non-existent or were issuing it with bogus invoices and ETR receipts.
The information sought relates to the investigation report in a letter dated June 26, 2018, to the company. The report allegedly established grand missing fraud perpetrated by suppliers.
One of the findings alleged to be that the suppliers to Pearl Industries did not sell or deliver goods and that they devised a scheme where they only print invoices and ETR that is sold to companies to inflate inputs.
KRA alleged that Pearl Industries suppliers issue fictitious invoices without actual sale at a commission and, in some instances, the invoices are duplicated or sold to other companies.
The firm and its directors Paresh Shah, Hitesh Shah, Subhash Nagda and Ashokkumar Nagda say they want to enforce the right to information so that they can defend themselves in various tax disputes.
They further claimed in the petition that KRA has intimidated and threatened them from asserting their rights to counter the allegations.
They also said the taxman issued an order barring its directors from leaving the country and that Mr Hitesh was at one point held at the Jomo Kenyatta International Airport while he was traveling with his family and embarrassed.
The court further heard that the company had also arranged for two directors of the firm to travel to China to meet business partners and sign a joint venture.
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Finance specialist with courses ranging from corporate finance, perfonal finance and startup finance. Msc. Acturail Science, Bsc. Finance, COP Insurance and phD. Business Advministration -FInance(ongoing)

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