Businessman Jimmi Wanjigi at All Saints Cathedral in Nairobi in May 2016. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP
The Kenya Revenue Authority is now pursuing Nairobi billionaire Jimi Wanjigi over tax evasion.
Documents
in our possession indicate that in May, the KRA wrote to Mr Wanjigi’s
company Enterprise Oil demanding Sh225 million in tax arrears for the
period between January 2008 and December 2012. The businessman appealed
against the claim in a memorandum dated June 21, 2017.
The
authority says Mr Wanjigi’s company “offered facilitation of awarding
of contract services as well as logistical support” to Chinese companies
such as Shengli Engineering and Consulting and China National
Aero-Technology International Engineering Company (Catic). It says that
since those services were consumed in Kenya, “VAT (value-added tax) is
therefore due and payable on them”.
The billionaire,
adversely mentioned in the Anglo Leasing scandals, has become the
subject of discussion on the campaign trail after it emerged that he is
one of the key financiers of the National Super Alliance.
TEN YEARS
This followed an exposé by the Nation
on how the businessman has, for the past 10 years, manipulated
politicians, first in the Jubilee administration and now in Nasa to get
mega-projects worth billions of shillings.
Already,
there are jitters within Nasa over a separate manifesto that contains
projects which Dr David Ndii, one of the authors of the launched Nasa
pledges, dismissed as the work of tenderpreneurs and people regarded as stakeholders.
“You
know we have become a stakeholder society. So people call themselves
stakeholders. Even tenderpreneurs are in there. In fact they are there
in a big way,” Dr Ndii said of the controversial document.
The
fight within Nasa and the new demands from the KRA puts Mr Wanjigi
together with companies associated with him under intense pressure.
The
taxman has also been making similar demands from Chinese companies, for
which he acted as an agent, and are thought to have evaded paying taxes
in Kenya.
In April this year,
High Court Judge Chacha Mwita stopped the KRA from freezing Catic’s
assets over Sh3.5 billion in outstanding tax returns. While issuing the
order, after an application by Catic, Justice Mwita said a freeze would
cripple the firm’s activities and that the demands were unprocedural.
Also,
the KRA had in September last year arrested Catic’s vice-president
Hongyou Huang, alias Yellow, and charged him with failing to pay Sh66
million in taxes on diverse dates between 2010 and 2014. Huang was
charged, alongside his companies Avic International Real Estate, ACEG,
Catic and Avic International Property Nairobi.
Catic is one of the companies that police now believe was behind the hacking of the KRA system.
Police
say that its officials, together with an unnamed Kenyan, were behind
the hacking of the database and the illegal issuance of work permits.
Mr
Wanjigi has been the local agent for Catic and Shengli, from which he
received hundreds of millions of shillings from the various contracts
that the firms won in the country.
Shengli
has been involved in several projects including the
multi-million-shilling upgrade of Western Kenya pipeline extension, and
the building of the $117.5 million (Sh11.7 billion) portion of the Thika
Superhighway from Kenyatta University to Thika.
Shengli
also won a tender to design the controversial Mombasa-Nairobi pipeline,
which saw Kenya Pipeline Company throw away a proposed 16-inch pipeline
that was to cost Sh16 billion, for a 20-inch pipeline at a cost of Sh53
billion. Shengli has since 2013 changed its name to Sino Petroleum
Engineering Corporation. For its part, Catic was involved in the
multi-billion-shilling transformation of the National Youth Service and
the cancelled Sh50 billion expansion of the Jomo Kenyatta International
Airport, an indicator of how Mr Wanjigi’s companies managed Kenya’s
infrastructure projects.
Documents
in our possession indicate that Mr Wanjigi charges between nine and 15
per cent of the contract sum as his fee. Records indicate that the
taxman has been pursuing the influential tenderpreneur since January
2013, when they first issued tax demands to his company. But Mr Wanjigi
objected to the demand, arguing that transfer between his companies
should not be deemed to be income. But the KRA said the directors did
not provide documents to support their position.
“Our position remains that all money banked in the firm’s accounts is from taxable sources,” the KRA said in its reply.
Another bone of contention was whether money from Mr Wanjigi’s other companies should be treated as loans.
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