NAIROBI– The Commissioner for Intelligence and Strategic Operations at the kenya Revenue Auhority (KRA), Githii Mburu, has warned traders against making false claims on the Value Added Tax (VAT) they have to pay.
Speaking at a training course for the Africa Academy on Tax and Financial Crimes Investigation being held at the Kenya School of Monetary Studies here Monday, he added that VAT fraud is one of the economic crimes which is denying Kenya much needed revenue.
The commissioner noted that most developing countries lacked the capacity to address economic crimes, especially tax fraud but he added that through capacity building of its criminal tax investigators, the KRA hoped it would be able to enhance revenue collection.
Githii explained that VAT fraud manifested itself in many forms, and in Kenya it was mostly through manipulation of claims to create refunds.
“This is seen through the ‘missing trader’ when a claim is made, yet there is no supplier, said the Commissioner. People manufacture invoices to claim VAT for supplies that have not been done, said Githii.
While Kenya is losing billions of shillings through false VAT claims, Githii said another form of fraud is manipulation of exports in which traders pretend to have exported commodities and then make claims for VAT reimbursement.
According to the African Union (AU) Advisory Board on Corruption, Africa loses more than 50 billion US dollars annually as a result of illicit financial flows through engagement in fraudulent schemes to avoid paying tax.
The board says African countries are losing in excess of 50 billion USD to tax evasion mainly propagated by exporters who utilize tax exemption loopholes to claim VAT refunds they are not entitled to.
The KRA, in conjunction with the Organization for Economic Co-operation and Development’s International Academy for Tax Crime Investigation, is training criminal tax investigators to be able to detect and investigate tax fraud.
Source: NAM NEWS NETWORK