DPP approves charges in alleged Sh3.9b VAT scam

Director of Public Prosecutions Renson Ingonga. 

Director of Public Prosecutions Renson Ingonga has approved charges against five individuals and 12 companies accused of conspiring to defraud the government of Sh3.9 billion in value-added tax (VAT).

Ingonga, in a statement said investigations by the Office of the Director of Public Prosecutions (ODPP) and the Kenya Revenue Authority (KRA) involved a review of 70 inquiry files.

Investigators found that a network of companies, known as “missing traders,” allegedly generated fictitious transactions and electronic tax invoices to facilitate tax fraud.

“These fraudulent invoices were subsequently used by other businesses to unlawfully claim VAT refunds or reduce their tax liability, despite no genuine purchases having been made,” said the DPP.

The five suspects, namely Henry Ateka Nyabwari, James Ojiambo Nyengenye, Amisi Zamda, Frank Nyabwari and Hesbon Onyoni, are accused of registering 70 companies allegedly used to execute the scheme.

Following the review, Ingonga approved prosecution in 36 cases involving transactions worth about Sh3.2 billion and an estimated VAT loss of Sh518 million.

“Of these, six have been prioritised for immediate prosecution, with a VAT implication of about Sh17 million,” he said.

The cases involve several companies, including Renova Limited, Larigi Enterprises, Njemtar Agencies, Jeflar Construction Company, Namtek Transporters Company Limited, Jawari General Supplies and Tekaza Investment & General Supplies.

The DPP said the remaining cases would be filed in court in due course, with suspects charged accordingly.

“The ODPP reaffirms its unwavering commitment to combating economic and financial crimes, including sophisticated tax fraud schemes, and to protecting public revenue.”