Businessman in “missing trader” tax evasion scheme charged Kshs 58 million tax fraud

A businessman was today charged with five counts of tax frauds including counts of tax frauds commonly known as “missing trader” before Milimani Court Chief Magistrate Hon. Martha Mutuku.

David Ngari Ndiritu, who is the sole proprietor of Aberdare Solutions, denied all the charges. KRA submitted that the accused is a beneficiary of the ‘missing trader’ tax evasion scheme, a tax fraud syndicate where a taxpayer uses several registered business names for fictitious invoicing.

The traders involved in the scheme use fictitious invoices to depict a business transaction where there is no actual supply or movement of goods and services. In the scheme, business entities mimic a genuine trading process by trying to meet all the legal requirements of a 'supply' for tax purposes. In the "missing trader” cases, the traders in the business chain do not supply any goods or services but "payment" is made to create notional cost of goods sold. The scheme appears to delink and hide the final economic beneficiary of the purchases.

In two counts, Mr. Ngari is accused of using fictitious invoices from Bosco Enterprises and Davron Petroleum Limited to illegally claim VAT refunds of Kshs.14 million and KShs.6.6 million respectively. The offences were committed between 2015 and 2018.The offence is contrary to various provisions of the Tax Procedures Act No. 29 of 2015.

In three counts, Mr. Ngari is accused of failing to declare earnings in Value Added Taxes (VAT) amounting to KShs. 133 million hence reducing VAT liability by about KShs. 21.5 million. Mr. Ngari was released on a bond of KShs. 500,000 and alternative cash bail of KShs.100, 000. The case will be mentioned on 10th December 2019.

Meanwhile, Jane Wahu Mbogwa, a wines and spirits business operator within Kimana town was also charged before Milimani Courts Senior Principal Magistrate Hon. Bernard Ochoi with conveying unaccustomed goods contrary to Section 199(B) as Read Together with Section 199(Iii) of the East African Community Customs Management Act 2004.

The accused was jointly with others not in court arrested on the 16th November 2019 at Loitoktok conveying 54 drums of 250 litres Ethanol within a dutiable value of Kshs. 4,597,431.75. She was released on a bail of KShs. 500,000 and alternative bond of KShs. 1 million. The case will be heard on 20th January 2020.

The Kenya Revenue Authority (KRA) strives to ensure all eligible taxpayers pay their fair share of taxes in time and remain tax compliant to avoid punitive enforcement measures including prosecution. KRA remains committed to building taxpayers trust through facilitation to foster Compliance with Tax and Customs Legislation to continually improve service delivery and revenue collection. KRA also endeavours to make taxpaying experience better through provision of a courteous and professional service.


Commissioner, Investigation and Enforcement Department- David Yego

PRESS RELEASE 22/11/2019

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Businessman in “missing trader” tax evasion scheme charged Kshs 58 million tax fraud