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Treasury warns traders making fake VAT claims

24 September 2013, 15:57

Nairobi - Treasury has issued a stern warning to traders making fake value added tax (VAT) claims.

Culprits face three-year prison terms or paying back twice the amount fraudulently claimed.

Parliament was set to debate on a Bill to that regard when it resumes its sittings on Tuesday while the treasury is seeking to set up a Tax Appeal Tribunal to deal with widespread bogus claims.

“A person who knowingly makes false claim for refund commits an offence and shall be liable, on conviction, to a fine not exceeding KES 400,000 or double the tax evaded, whichever is higher, or to imprisonment for a period not exceeding three years or both,” reads part of  the Tax Appeals Tribunal Bill 2013.

The proposed Bill will pave way for the formation of a tribunal comprising at least 15 members to 20. The tribunal will mainly deal with refund cheats who have either passed as registered persons or have since ceased to be registered but are charging VAT.

The fraudulent claims have partially contributed to sudden rise in stock of unpaid refunds from KES 27 billion to the current KES 30billion over the year.

The Chairperson of Parliamentary Committee on Finance, Trade, and Planning, Benjamin Langat, has already published the Bill as per the proposals announced by Finance Cabinet Secretary, Henry Rotich, in the 2013/14 budget.

- CAJ News


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