Times Tower in Nairobi, the headquarters of the Kenya Revenue Authority (KRA).
The Kenya Revenue Authority (KRA) is investigating Greek firm Inform Lykos (Hellas) SA over alleged evasion of taxes totalling Sh650 million.
The taxes stem from a contract for the supply of examination papers for national tests since January 2020.
The taxman has written to the Kenya National Examinations Council (Knec) demanding multiple documents related to the Sh2.8 billion examination papers tender, including the contract signed between it and Inform Lykos.
The firm is suspected to have lied to the KRA by indicating that the Knec contract value was €4.2 million (Sh636 million) hence lowering the tax liability to Sh132 million.
New Mitihani House building pictured on August 31, 2023, in South C, Nairobi.
The KRA, working with the contract value of €18.7 million (Sh2.8 billion), believes the tax payable was Sh781 million. That means that the firm could have to pay the Sh650 million shortfall, and interest on the amount as well as penalties.
A source at the KRA said that the taxman’s calculations include Sh653.9 million in VAT, Sh250 concession fee, Sh70.9 million in Import Declaration Forms fees and Sh56.7 million in Railway Development Levy.
The Nation has learned that the KRA could also evaluate the taxes Inform Lykos paid when supplying ballot papers to the Independent Electoral and Boundaries Commission (IEBC) for the 2022 General Election.
“The Commissioner is making an inquiry into allegations of tax evasion through under-declarations of values declared for customs purposes on imports made by Kenya National Examinations Council (Knec) for various exams and other materials covering the period January 2020 to date,” a letter dated January 26 from the KRA to Knec states.
The KRA has already interviewed some senior Knec officials as part of the investigations. The taxman has also conducted interviews with Ansta Logistics Ltd, the clearing and forwarding agents who handled the examination papers upon their arrival in Kenya.
In 2020, Lykos became the first company outside the UK, since independence, to supply Kenya with national examination papers.
Some of the previous contractors have also been dogged by controversy. In 2015, UK courts found Nicholas Smith and his firm, Smith & Ouzman, guilty of giving kickbacks to Knec and IEBC officials to secure contracts. The kickbacks scheme, dubbed the Chickengate scandal, triggered a criminal case in Kenya. Former IEBC officials James Oswago, Hamida Ali Kibwana and Trevy James Oyombra were charged but were acquitted in 2021.
The court held that there was insufficient evidence to convict them, and that prosecutors could not solely rely on the UK files and proceedings to secure a conviction.
For Knec, former CEO Paul Wasanga and officials Ephraim Wanderi, Michael Ndua and Geoffrey were not charged despite being adversely mentioned in the UK court papers.
Local investigations failed to prove that they had received bribes from Smith & Ouzman.
Follow our WhatsApp channel for breaking news updates and more stories like this.
