The Taxman detectives on Friday raided offices of tycoon Mohammed Jaffer over Sh200 Million tax evasion probe.
This is the tycoon that has been alleged to be the one sponsoring Raila Odinga’s political journey and was recently ordered to refund Sh1.8 Billion in yet another SGR land scam.
In a sting operation, African Gas and Oil Company Mombasa offices were raided in a mission to collect crucial documents in a Sh200m tax evasion probe against billionaire Mohammed Jaffer’s firm
According to the intelligence reports by KRA, the company has been involved in underpayment of the corporate tax, reducing its tax liability by under-declaring and undervaluing imports.
Investigations on the tax evasion has been going on for sometime according to KRA officials who threatened to slap the company with more sanctions should it be necessary. The financial documents being scrutinized goes back to when the company was formed.
African Gas and Oil Company deals with the importation, repacking, supply and exportation of liquefied petroleum gas (LPG) and enjoys a monopoly in the sector. The company owns Pro Gas.
Despite the significant drop of LPG prices at the international market, locally the prices have remained largely unchanged.
A government’s Gas yetu project that was put in place in October of 2016 to make gas affordable to the common mwananchi appears to have been forgotten 2 years later.
The project collapsed due to allegations of corruption, lack of funds and supply of defective cylinders that pose safety risks to users, however, this was notvthe case.
The project was shelved due to corruption and bribery at the energy sector resulting in the government ceding the bulk importation of LPG to Africa Gas and Oil Ltd and in the process denying the country the benefits of cheap cooking gas.
In 2017 the government allocated Gas Yetu Ksh2.2 billion for the period 2017-2019. A further Ksh700 million was allocated through a supplementary budget raising the total cost of the project to Ksh2.9 billion. Gas yetu project would see millions of households receive subsidised 6kg cooking gas cylinders at a cost of Ksh 2,000. 5 million households were targeted.
The billionaire was recently put on the spot over alleged encroachment of Nairobi national parkencroachment of Nairobi national park where GBHL is erecting silos.
Jaffer is not new to tax rows with KRA, in 2015 he succeeded in stopping the taxman from demanding more than Sh180 million alleged to be undeclared tax.
Mohammed Jaffer, the managing director of the multi-million-shillings Grain Bulk Handlers Limited (GBHL), moved to court in 2011 when the Kenya Revenue Authority (KRA) issued agency notices to his bankers.
KRA told the court that it conducted investigations on various accounts held by the businessman and found that he failed to declare huge deposits in his bank accounts.
KRA served Mr Jaffer with the first assessment tax notice alleging that he had earned Sh300 million in business in 2007 and another Sh15.8 million but refused to pay an additional Sh90 million in tax arrears.
But he countered the allegation saying he was away residing in Dubai and only earned an income as a director of the company.
He was further accused of earning Sh300 million in business and another Sh31.9 million in 2009 where he was entitled to pay the taxman an additional Sh90 million.
But the businessman claimed that after he was appointed the firm’s MD in 2009, he changed his residence to Kenya and his only source of income was from his employment. He denied having any income from self-employment.
KRA said a perusal of the income tax returns for January 1, 2007 to July 27, 2011 indicated that monies banked in Mr Jaffer’s accounts from the proceeds of sale of grain were not declared for tax purposes.
The taxman, therefore, said that it was lawfully entitled to treat the amounts in the accounts as undeclared income and to consequently issue an additional assessment to the tycoon.