Companies whose dealings with the National Youth Service are under investigation have a tax bill which could run to Sh1.2 billion.
The Kenya Revenue Authority has been drafted into a government task force investigating the NYS scandal, effectively taking over from the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigations.
Papers filed in court by businesswoman Josephine Kabura claimed that far from investigating the scandal, DCI and EACC either took part in committing the crimes or covering them up.
Though President Uhuru Kenyatta is reported to have taken a personal interest in the investigation, the multi-agency task force will likely continue to be treated with scepticism, given the publicity stunts and cynical manipulations alleged by Ms Kabura.
KRA has assessed the income tax and value added tax chargeable on payments and believes that Sh352 million is recoverable tax and Sh850.4 million as unpaid VAT.
The task force brings together the Office of the President, the Office of the Directorate of Public Prosecutions (ODPP), the Directorate of Criminal Investigations (DCI), KRA and the Asset Recovery Agency (ARA).
NO CONVICTIONS YET
So far, it has found out that besides the Sh791 million, an additional 15 companies also transacted business with the NYS in a questionable manner, raising the prospect of the total loss of funds to Sh1.6 billion.
A total of 11 business people have been taken to court to face charges of corruption and money laundering over the scandal.
Corruption suspects are always charged but rarely, if ever, convicted.
Ms Kabura claimed investigators conspired to bring faulty charges against her with the intention of undermining the case.
KRA has issued a first demand of Sh400 million from the beneficiaries of the questionable transactions. The file was submitted to the ODPP, recommending the prosecution of suspects for evading tax payment last December.
“A meeting was thereafter held on January 8, 2016 between KRA, EACC and ODPP to review the file, where further areas of investigations were agreed on. The ODPP has since completed the review of the file and forwarded the same with recommendations to both the KRA and EACC on areas to be covered with EACC as the lead investigator,” said a report from the task force.
Sources said it is the new areas of investigations that have pushed up the amount of income tax and VAT, which KRA is demanding from the beneficiaries under the provisions of the Anti-Corruption and Economic Crimes Act.
Following the task force decision to place all investigations under its technical team, the EACC will be required to work under its ambit in identifying the level of tax evasion in the NYS scandal. “Once completed, the file is to be forwarded to the DPP for further directions,” it said.
The report shows that four additional NYS cases which involved a total of Sh321.5 million have also been assessed by the KRA for tax evasion.
The cases involve the Sh302 million spent on consultancy services for youth, women and people with disabilities, Sh15 million for construction of NYS camps, Sh4 million for the Naro Moru retreat and Sh500,000 used in the repair of a vehicle used by the service’s director.
The investigations into the NYS scandal have gone a notch higher after Ms Kabura claimed former Devolution Cabinet Secretary Anne Waiguru got a share of Sh791 million in question.