Kenya Revenue Authority now wants the court to set aside orders suspending the decision to freeze Chinese firm Housemart accounts over Sh 2.2 billion tax arrears.
According to the taxman, the company, whose owners and directors are foreigners has no known assets in Kenya and if the orders are not set aside and the funds siphoned, they will have nothing to hold on to.
KRA argues that Housemart has been under declaring sales and claiming input VAT fraudulently thereby suppressing the tax payable.
The preservation notice was issued in respect with accounts from NIC Bank, Standard Chartered Bank and Bank of Africa.
“The order as crafted allows the applicant to access the funds in the various banks where the KRA placed the preservation Notices.
It is KRA’s argument that if the orders are not reviewed , it is prejudicial and will have denied the Commissioner of Investigation and Enforcement, Commissioner of customs and Excise and KRA an opportunity to preserve the funds to secure taxes.
“The judge did not give any condition as to what security for the taxes that may be established or per the preliminary findings dated 21st September 2018 for the sum of Sh 2,243,781,488.78.
According to an affidavit on behalf of the agency, Housemart is creating a facade or acts as a facade for other parties who have no physical presence in Kenya leading to monies earned being remitted to other countries without subjecting the same taxation in Kenya.
“Most of the directors listed including those of the Housemart are foreigners and corporations with foreign addresses in foreign jurisdictions which are suspected to be tax havens making it difficult to repatriate the funds once they exit Kenya borders,” argued KRA.
Companies accused of receiving cash on behalf of the firm include Colila Limited, Akubi Limited, Nkemm Limited, Obeset Kenya Limited, Sunda (Industrial) Company Limited and Wise Databank Limited. The Chinese firm alleges that some of these companies are its suppliers.
However, it is KRA’s argument that the mentioned companies were registered by Housemart Limited.
The company moved to the High Court after one of its Director’s Ye Wei was charged in a Nairobi Court with several counts of defaulting/failing to remit taxes due since 2015.
He denied the charges and was releases on a cash bail of Sh 1 million.
