KRA warns traders of fictitious invoicing

The Kenya Revenue Authority (KRA) has warned business owners and operators against presenting fraudulent invoices as part of their income tax reporting process ahead of the 30th of June deadline for the filing of returns for the 2017/2018 financial year.

The warning comes in the wake of rising cases of tax fraud in the country where most cases have involved business owners and operators.

In April for instance, KRA charged two business people after it was alleged that the two had registered more than nine business names and made fictitious invoicing in excess of Sh15 billion.

KRA has taken time to warn taxpayers against engaging in the unscrupulous practice saying there exists a system which only allows for the use of valid invoices in income-tax reporting.

Speaking during a press briefing on Wednesday, KRA Commissioner for Domestic Taxes Benson Korongo said the illicit practice by business operators has starved the government off the much needed revenue.

“It denies KRA and the government the correct taxes because with the fake invoices, one cannot determine once profitability and the correct application of taxes,” he said.

Mr Korongo urged traders to exercise transparency in their tax reporting promising dire consequences for those found culpable of engaging in deceitful schemes to defraud government.

“We are warning business people to ensure that they avoid the use of fake invoices. Besides having penalties applied, there is a high possibility for prosecution. We have begun the prosecution process for those engaged in the (fraudulent) scheme,” he added.

The revenue body will bolster its capacity over the next financial year with the aim of casting a wider net to castigate those involved in tax evasion and fraud.

Part of the measures involved includes the devolution of the KRA Market Surveillance Department which will take the government’s war against counterfeits to the counties.

The formulation of policy surrounding illicit trading is part of a government led initiative to bolster KRA’s revenue collection role in an effort aimed at meeting the government’s revenue collection target by sealing loopholes in the country’s taxation system.