Twenty suspects, including directors of five companies, are now facing charges over a complex tax fraud scheme that has recently come to light.

The Kenya Revenue Authority’s (KRA) investigations have unveiled tax evasion offences by 15 individuals and five companies, resulting in a total tax implication of Sh66.7 million.

A notable case within this scheme involves three directors from two companies who allegedly falsified purchases exceeding Sh1.5 billion.

These false transactions were reported to reduce their companies’ tax liability through input claims on non-existent transactions.

“In this sophisticated fraud, fictitious invoices were created to simulate business transactions that never occurred,” said a KRA spokesperson.

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Further scrutiny of VAT declarations from December 2021 to December 2023 showed that the taxpayer purchases claimed were entirely non-existent.

The suspects are set to appear beore court on Wednesday, June 19. 

Other cases awaiting trial at Milimani Law Courts include the deliberate omission of income by a taxpayer leading to a Sh11.5 million tax loss, violations of customs laws by a clearing and forwarding company and its directors through false customs entries, and the theft of over 25 tonnes of milk powder by Customs officials.

Previously reported tax fraud schemes by the KRA include income suppression through secret bank accounts, smuggling across borders, concealment of imports, and misdeclaration to evade taxes.