KRA links Ksh.487M tax fraud syndicate to Lamu West MP Muthama


KRA links Ksh.487M tax fraud syndicate to Lamu West MP Muthama
Lamu West MP Stanley Muthama. PHOTO | FILE

In Summary

  • The taxman, in a statement released on Monday, said the legislator was on Thursday last week arrested by detectives from the Directorate of Criminal Investigations (DCI).
  • He was then arraigned in an Eldoret court on Monday before Chief Magistrate Charles Obulutsa.
  • The court heard that Mr. Muthama, being the Director of Stansha Company Limited, knowingly made an incorrect statement in the company’s Income Tax and VAT returns for the period 2013 to 2017.

The Kenya Revenue Authority (KRA) has reportedly unearthed a tax fraud syndicate worth Ksh.487 million involving Lamu West Member of Parliament Stanley Muthama.

The taxman, in a statement released on Monday, said the legislator was on Thursday last week arrested by detectives from the Directorate of Criminal Investigations (DCI).

He was then arraigned in an Eldoret court on Monday before Chief Magistrate Charles Obulutsa.

The court heard that Mr. Muthama, being the Director of Stansha Company Limited, knowingly made an incorrect statement in the company’s Income Tax and VAT returns for the period 2013 to 2017.

“Being registered taxpayers chargeable to tax, within the republic of Kenya and in receipt of income derived from business activities within Kericho, Kajiado and Nakuru Counties, failed to pay tax to wit Corporation Tax, VAT and PAYE of Ksh.487,914,642, for the tax period 2013 to 2017,” read court papers.

The Lamu West MP was charged with thirteen counts of fraud in relation to tax contrary to section 97(a) as read with Section 104(3) of the Tax Procedures Act, 2015.

He pleaded not guilty to all the counts and was released on a cash bail of Ksh.500,000 or a bond of Ksh.3,000,000 and one surety of a similar amount.

Stansha Company Limited was allegedly contracted by Ardhi Water Services Board and The Lake Victoria South Water Services Board for construction of Sewerage and Water Treatment Plant, as well as by CMC DI Ravenna for the construction of Itare water dam.

The Company however, according to the statement by KRA, under-declared their income thereby evading payment of the said amount.

“If convicted the accused will be liable to pay a fine not exceeding Ksh.10 Million or double the taxes evaded whichever is higher or to imprisonment for a term not exceeding 10 years or to both,” added the statement.

“This is in addition to payment of all the taxes not paid.”

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Story By Ian Omondi
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