Chinese firm found guilty of evading over Sh 1 billion in taxes
Business
By
David Njaaga
| Aug 13, 2024
The Tax Appeals Tribunal (TAT) has upheld a tax assessment of Sh1,047,557,661 against China Communications Construction Company Limited.
The tribunal rejected the company's appeal on Friday, August 9, 2024.
According to the tribunal, China Communications Construction Company Ltd used a complex scheme involving fictitious invoices and shell companies to evade over Sh1 billion in taxes.
The Kenya Revenue Authority (KRA) issued the assessment on February 3, 2023, following an audit.
The company, a majority state-owned entity, contended that the audit was flawed.
READ MORE
'The talent exists': Maingi calls for grassroots sports funding
How Endebess hospital could bring medical care closer to residents
46 tonnes of smuggled sugar seized in Turkana
More protest claims worth Sh83.65m processed
State pledges to enact Older Persons Bill by 2027
Government says Older Persons Bill 2024 to be enacted before 2027
Kenyan Wawira Njiru named in TIME100 Next list for 2026
County Oversight Accountability Bill violates provisions of the Constitution
KHRC warns El Nino response could deepen human rights violations
Tobacco farmers seek tax relief as MPs review Tobacco Control Bill
KRA investigations revealed inflated VAT claims from six shell companies without known addresses.
The companies then passed the claims to other shell entities, complicating the scheme.
"The appellant failed to address the issues of fraud and tax avoidance schemes raised by the Respondent's witness," the tribunal said.
"The burden of proof shifted to the Appellant to provide evidence by affidavit, witness statements or otherwise to rebut these assertions. This was not done."
The tribunal also noted that the firm's transactions seemed to be an elaborate scheme to avoid tax payments.
"It is also not common for all traders and entities doing business with the Appellant to adopt the same modus operandi of lacking documents, converting Sh to USD and transferring funds to China," it added.