Two directors of alleged fixious companies Mahesh and Tirth Construction Company are battling over Sh 49 Million tax fraud against the law.
Maheshkumar Batukraijani and Valani Keshka have been accused that on diverse dates between October 20,2015 and January 20,2016 ,jointly with others not before the court being the directors of Mahesh and Tirth Construction Company Limited,unlawfully made an incorrect statement in the value added Tax return for the period of October 1,2015 to December 31,2015 thereby reducing his liability to VAT by Sh 1,738,429 payable to the Commissioner,Domestic Taxes.
The two faced several other counts relating to Tax Fraud against the law on similar dates and places.
In count II they are said to have unlawfully made an incorrect statement in the value added tax for the period of March 1,2016 to January 1,2017 thereby reducing his liability to VAT by Sh VAT 7,055,595 payable to the commissioner,Domestic Taxes.
In the third count they are charged with unlawfully making an incorrect statement in the VAT by Sh 17,483,602 payable to the Commissioner,Domestic Taxes.
They faced another charge of failing to pay tax contrary to the law amounting to Sh 3,2 Million against the law.
While giving his testimony in the case,George Oburu the officer from the Tax Investigation Unit who appeared before magistrate Dabile Ndugi said that based on the evidence he had ,he was convinced that the accused should get arrested and they were summoned and interviewed and recorded statements.
“Having received all the documents had briefed me to examine the VAT returns in respect to Mahesh and Tirth construction company for the period covering October 2015 to September 2017”,he said.
He told the court that he had established from the system that the company had claimed input tax from two companies that had been flagged as fictitious company,this companies in the sense that they were registered on paper as genuine traders with the registrar of companies and also registered with Kenya revenue authority but in the actual fact they were not trading anywhere ,they had non physical of trading.
“It was a scheme that was made to assist genuine traders by issuing fictitious invoices to help the genuine trader to reduce taxes payable to the taxman,”he added.
The commissioner consequently disallowed all the claims associated with the two companies.
“Computed the amount of taxes mahesh and Tirth construction companies as follows from October 2015 to September 2017,the VAT SH26,232,627 Million,”he added.
The cooperation tax was sh 49,186,176 Million.
