A number of Chinese officials have been accused of robbing Kenyan taxpayers off Ksh24 billion of taxes after forming a firm that never remitted the levies to the government.
According to an expose by the International Consortium of Investigative Journalists (ICIJ), the firm is said to have been involved in creating shell companies that received payments, offering fake loans and fictional imports.
The company reportedly colluded with local bankers and other stakeholders who helped in the dubious deals, which have come to be referred to as ‘money washing’.
It is said that the suspects, through the firm, made millions of shillings in the local market but the money was diverted to Mauritius without paying any taxes to the Kenyan government.
“Money is made in Kenya and routed through a series of phantom entities and transactions,” the investigation by ICIJ stated.
The company is said to have been working in carhots with four other firms four other firms in Mauritius. Interestingly, they seem to have been fake companies as they did not have permanent office addresses.
One Chinese national, who is based in Beijing, is listed as a director. He holds a high office in the Standard Gauge Railway (SGR) project in Kenya.
Investigations indicate that the said firm transferred Ksh943 million to fake companies between 2018 and 2020.
A past audit by the tax authority revealed that the Kenyan firm was behind the multimillion scheme for tax evasion by having corporate structures that were facilitated by bankers and other professionals.
ICIJ revealed that the Kenyan firm was fined Ksh943 million in penalties and fines which they are yet to pay. The officials of the Kenyan firm alongside the Chinese national did not respond to comments from the media by the time of going to press.
Mauritius has been on the spot following ICIJ’s revelation in the Mauritius Leaks investigation in 2019 that detailed how the island attracted businesses in Africa that sought to pay fewer taxes.
“Mauritius offers companies secrecy, low tax rates and a network of bilateral treaties that critics allege allows profitable corporations to avoid paying taxes in some of the world’s poorest countries. The government of Mauritius denies the island nation is a tax haven.”
ICIJ is known for producing well-detailed investigative pieces, especially, regarding how individuals in different countries starch questionable wealth abroad.
In October 2021, in what came to be known as Pandora papers, the group’s investigation leaked showing how world leaders and business people, including President Uhuru Kenyatta had hidden billions in offshore accounts.