The Kenya Revenue Authority has stopped the sale of all land belonging to Tatu City.
Commissioner General John Njiraini told the National Assembly Lands Committee that the agency had banned officials of the firm behind the project from disposing of thousands of acres of land until an ongoing investigation on claims of tax evasion is concluded.
In a petition that has been filed before the committee, shareholders have accused the directors of Tatu City and its sister company, Kofinaf, of failing to pay tax amounting to over Sh6.5 billion.
During his meeting with MPs on Tuesday, Mr Njiraini said the two companies might have been under-declaring their tax returns.
“In 2015, KRA, after an in-depth audit on Kofinaf Company, it found out that the firm had under declared its returns by Sh275 million. The company was slapped with a penalty of Sh5.5 million,” he said.
“Tatu City, on the other hand, under-declared its returns by Sh42.4 million,” he said.
MP Babu Owino (Embakasi East) challenged the Kenya Revenue Authority (KRA) caveat, arguing that the agency had no powers and authority to impose it.
But Njiraini dismissed the claims, insisting that it was within KRA's mandate to impose such caveats in situations where claims of tax evasion arose.
“What I have realised is that the matter before the committee is not an audit matter but that of tax evasion. I will refer the matter to our investigative body to immediately commence a probe,” said Njiraini.
The committee gave the authority two weeks to complete the probe.