The Kenya Revenue Authority has successfully petitioned the High Court in Nairobi (Commercial and Tax Division) to preserve funds held in various accounts belonging to 12 firms in 7 different banks pending assessment of the tax due.
The companies are Vine Pack Limited, Kings Commodities Limited, Boniface Maina Kagechu, Maha Stores Limited, Igaal Trading Company Limited, Beder Wholesalers Limited, and Deira Commodities. Others are Highrise Commodities Limited, Tazama Commodities Limited, Tazama Distributors Limited, Sema Commodities Limited, and Highrise Hauliers Limited. They hold bank accounts at NCBA Bank Limited, KCB Bank Limited, Guaranty Trust Bank (K) Limited, Equity Bank Kenya Limited, HFC Kenya Limited, First Community Bank, and ECO Bank Kenya Limited.
In a ruling dated August 9, 2023, by Judge A. Mabeya, the judge ruled, “If the funds in the subject accounts are not preserved, there is a likelihood of the interested parties frustrating the collection thereof. Accordingly, I allow the application in terms of prayer No. 2 of the motion. The order will be in force for 60 days only”.
Preliminary investigations had established that Vine Pack Ltd. was liable to pay tax upon the release of unaccustomed sugar meant for industrial ethanol, but it was released to the market before payment of the requisite taxes.
KRA suspected that several companies mentioned in this case were engaged in tax evasion or were accessories to tax evasion. It was discovered that KRA had assessed a tax of Ksh. 20,064,000 against Vine Pack on March 22, 2023, however, the unaccustomed sugar disappeared from the warehouses, and the same was under investigation.
As a result, KRA suspected that the said firms were therefore involved in a scheme of tax evasion. KRA, in their pleadings, claimed that the mentioned firms may frustrate the recovery of taxes if the funds held in the banks on behalf of the firms if not preserved.
The ruling reads in part, “In the premises, I find that the applicant has proved its case on a balance of probabilities. If the funds in the subject accounts are not preserved, there is a likelihood of the interested parties frustrating the collection thereof”.
