KRA boss denies ties with firm in tax dispute

The head of the Kenya Revenue Authority has denied claims that he is a shareholder in a company embroiled in a dispute with the tax collector but said that he knows the complainant and his co-shareholder. KRA Commissioner General John Njiraini says he had been twice approached by emissaries of Njama Wambugu, who has claimed in a case filed in court that Mr Njiraini owns shares in Space & Style Limited.

In a letter to the KRA board, Mr Njiraini explains the genesis of the case in which he is adversely mentioned is in his refusal to help Mr Wambugu and his companies escape a tax demand of Ksh250 million.

“I declined the requests, instead asking them (the emissaries) to advise the complainant to engage the relevant department to have his matter resolved,” Mr Njiraini says in the letter dated 5th March. “On both occasions, they warned me that the complainant had vowed that he would drag my name through the mud if I did not intervene in the matter expected.”

He did not change his stand. Space & Style was then issued with a formal assessment of tax due on November 29, 2018, which Mr Wambugu objected on December 24, 2018 and KRA then confirmed the assessments on February 19 and 20, says Mr Njiraini. All these were within the timelines provided for in the Tax Procedures Act.

Space & Style, which sells the Decra brand of roofing tiles, has since filed a Notice of Appeal to the Tax Appeals Tribunal. Mr Wambugu has concurrently filed the case at the Constitutional Court claiming that Mr Njiraini is a co-owner of the company through a Hong Kong-based holding company.

Mr Njiraini told the board that he knows Mr Wambugu. “Whereas I am familiar with the complainant and one of the companies where he is involved, I wish to confirm that I have no dispute with him and neither am I supporting anyone involved with a dispute with him,” Mr Njiraini stated in a letter seen by Business Today.

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He also denies the claim that he owns shares in Space & Style through an offshore company, Decamis Limited, which is registered in Hong Kong. “The allegations about my shareholding in one of the companies through an offshore entity are false and fabricated. I do not hold any shares in any of the complainant’s businesses and neither have I held any financial or managerial interests in any of them,” he said.

He added: “I have neither originated nor influenced the work done by the investigations department, all of which has been performed in accordance with the law and KRA procedures in such matters.”

Allegations about my shareholding in one of the companies through an offshore entity are false and fabricated.

Mr Njiraini says this is not the first time Mr Wambugu has made false claims against him. Last year, Mr Wambugu claimed that the KRA boss had influenced the appointment of a KRA director in return for a favour. “This allegation was made merely to muddy my reputation and draw my name into a dispute that I have not been a party to,” said Mr Njiraini.

He says the complainants’ consistent negative actions are “influenced by the fact that I have repeatedly refused to accede to his requests to intercede in respect of the KRA tax assessment. Moreover, he had hoped that I would support his side in the dispute with his co-shareholder, a matter that I have steered clear of, despite being known to both of them,” Mr Njiraini stated.

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Mr Wambugu has filed a separate suit accusing KRA of slapping him with exorbitant tax demands as intimidation and harassment. Mr Njiraini says KRA lawyers would file a preliminary objection to have the tax matters heard at the Tax Appeals Tribunal as it is the right forum.

“Beyond that stage, further appeals ought to be domiciled at the Commercial and Tax Division, which was set up with the express mandate to hear tax disputes,” says Mr Njiraini, indicating that he would appoint a lawyer to represent him in the case in which he is named as an individual.