BIDCO SHOULD PAY SH5.7B TAX ARREARS, DEMANDS OMTATAH.

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Bidco Africa and its chief executive Vimal Shah who has been sued for failure to pay Sh5.7billion tax arrears to the Kenya Revenue Authority (KRA). .
BY SAM ALFAN.
CONSUMER goods manufacturer Bidco Africa and its chief executive Vimal Shah have been jointly sued by civil rights crusaders Okiya Omtata and Wyclife Nyakina Gisebe for alleged failure to pay Sh5.7billion tax arrears to the Kenya Revenue Authority (KRA).

Omtatah and Nyakina claim they recently obtained conclusive documentary evidence that the firm, the businessman and the tax agency “have colluded to defeat public interest in the recovery of Sh5.7billion tax arrears owed by Bidco Africa.” 

“The overdue tax amount, plus interest and penalties, remain uncollected in circumstances that point to collusion to evade tax, involving Bidco Africa, Vimal and the KRA,” they said in an urgent constitutional petition presented to High Court Judge Joseph Onguto. 

The two lobbyists recalled High Court Judge David Majanja had delivered a judgment in favour of KRA on August 6, 2013, allowing the agency to collect tax arrears and other fees amounting to Sh1.3billion from the Thika-based manufacturer. According to a whistle-blower’s report, the firm’s tax exposure on unpaid duty, including Value Added Tax 9VAT) was above Sh4.3billion byDecember 31, last year, they claimed.

Omtata and Nyakina said they were aggrieved that through fraud and deceit, the manufacturer evaded paying duty on imports between June 1992 and April 1998. The scheme was centred on the fraudulent and illegal tax-free importation of finished goods for dumping on the Kenyan market disguised as raw materials to be used in the manufacture of goods meant for export, they explained in court documents.

They said the ministry of Finance, in a letter dated September 12, 1995, declined to grant the firm any duty or VAT remission on raw materials for the manufacture of plastic bottles and similar products since the processing was done by a third party. A fortnight later, KRA’s Henry Ndiema signed the firm’s customs exemption form when it was submitted on September 26, 1995, they said.

“This petition raises substantial facts relating to corruption in the payment of corporate taxes. Corruption in the collection of taxes is among the challenges that cost the country dearly by starving it of funds it requires to develop,” Omtatah and Nyakina said.

Justice Onguto directed the duo to provide the respondents with the petition and supporting documents to facilitate the hearing of the matter.

 

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