Five suspects, 12 companies face alleged tax fraud charges

NAIROBI, Kenya, October 15 – Investigations into an alleged KSh3.9 billion VAT fraud scheme have uncovered a network of companies suspected of generating fictitious transactions and electronic tax invoices to facilitate unlawful tax claims.

The Office of the Director of Public Prosecutions (ODPP) says the companies, commonly referred to as “missing traders,” allegedly generated invoices that other businesses used to claim VAT refunds or reduce their tax liabilities.

The transactions were allegedly recorded despite no genuine purchases having taken place.

The DPP has approved charges against five individuals and 12 companies following joint investigations with the Kenya Revenue Authority (KRA) and a review of 70 inquiry files.

According to the ODPP, the five are alleged to have been involved in registering 70 companies that were instrumental in executing the scheme.

The prosecution has been approved in 36 cases involving transactions worth approximately KSh3.22 billion, with an alleged VAT loss of KSh518 million.

Six cases have been prioritised for immediate prosecution, accounting for an alleged VAT implication of KSh17 million.

The ODPP says the remaining files will be registered in court in due course.

The agency has pledged to pursue complex economic and financial crimes as part of efforts to protect public revenue.