By The Weekly Vision Reporter
The Immigration Department in Kenya and the Kenya Revenue Authority (KRA) have been petitioned by a ‘concerned Kenyan’ to move in with speed and investigate alleged tax evasion and work permit scams at a consultancy firm, KCIC Consulting. There is a high level of suspicion surrounding KCIC Consulting CEO Prabkahar Vanam’s work permit status in Kenya, it is alleged that he has been working in the country without a valid work permit, which is a direct violation of the country’s laws.
By failing to obtain the required work permit, Mr. Vanam has infringed upon Kenya’s immigration laws. Section 34 of the Kenya Citizenship and Immigration Act, 2011 states that, no person who is not a citizen of Kenya shall enter or remain in Kenya unless they have the appropriate visa or work permit.
KCIC Consulting, in contrast, ought to be scrutinized for potentially infringing upon Kenya’s Immigration Act, which mandates that “every employer must apply for and obtain a work permit or special pass before granting foreign national employment. A violation of this provision by an employer can result in penalties, including fines of up to Ksh. 500,000, imprisonment for a maximum of three years, or both.”
The Kenya Revenue Authority detectives have been called upon to thoroughly examine tax evasion allegations at KCIC Consulting. President William Ruto’s government is experiencing substantial financial losses due to unremitted tax revenue. It has come to light that KCIC Consulting’s top management has allegedly been evading tax obligations through failure to deduct funds and remit the same to KRA for specific individuals under their employment (consultants). Furthermore, they are illegally withholding PAYE remittances, resulting in unauthorized advantages for these particular employees.
The allegations are that KCIC Consulting, in collaboration with said employees, has carefully orchestrated a scheme to avoid deducting and forwarding PAYE to KRA, only remitting a mere 5% as withholding tax rather than the complete PAYE remittances.
Based on the above information, it has been discovered that among the employees (consultants) involved are several individuals (names withheld) whose salaries are in the range of Ksh. 500,000. Investigations reveal that KCIC Consulting management only remits Ksh. 25,000, a 5% withholding tax, to KRA each month, whereas the total PAYE due to KRA should be 25% of his net salary.
While KCIC Consulting through their spokesperson maintains that the individuals are consultants, a comprehensive investigation has revealed that, according to the definition and employment guidelines provided by the Kenya Revenue, they are, in reality, employees.
According to financial analysts, the arrangement between KCIC Consulting and the individuals mentioned above can only be applicable if KCIC Consulting was paying a consultancy fee to a registered consultancy firm; in that case, the individual would then be paid by that firm, who would then remit PAYE to KRA, not KCIC Consulting, as is the case now.
The current situation entails KCIC Consulting and the individuals mentioned above engaging in illicit activities by allegedly embezzling funds meant for KRA. They must be held accountable for their actions under the law. KRA must also extend its investigation to cover a range of corporations that have been involved in business dealings with KCIC Consulting to ascertain whether there have been any occurrences of tax evasion in connection with the contracts they have executed.
