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Tycoon Humphrey Kariuki Says Tax Fraud Case Fabricated to Malign Him

The allegations levelled against me are untrue, without merit, fabricated and intended to use the judicial process to tarnish my name

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Tycoon, Humphrey Kariuki, Tax
Billionaire Humphrey Kariuki .

BY GEOFFREY ISAYA

Billionaire Humphrey Kariuki has come out to defend himself, two days after he was charged with evading the payment of taxes totaling Sh41 billion.

In a statement dated August 19 but released to journalists on Wednesday, the businessman said he is a victim of envious individuals, unsettled by his vast business empire across the world.
“The allegations levelled against me are untrue, without merit, fabricated and intended to use the judicial process to tarnish my name.”Kariuki said he is “a law-abiding citizen who believes in the rule of law.”

He claims the said people, who are not mentioned in his statement, want to destroy his reputation and business by implicating him in offences he said he is not aware of.

Tycoon, Humphrey Kariuki, Tax
Billionaire Humphrey Kariuki has come out to defend himself, two days after he was charged with evading the payment of taxes totaling Sh41 billion. Pixabay

The tycoon’s troubles started early this year after detectives raided his Africa Limited Spirits firm in Thika, where other than millions of fake excise stamps, they recovered tonnes of undeclared ethanol.

In self-defense, Kariuki who claims he does not directly run the management of the firm refuted owing the taxman a penny, while dismissing the charges as false and in bad faith.

“I also affirm that due to my business interests outside the country, I am in Kenya for less than 130 days a year,” Kariuki said.

He said: “Most of my time is committed to my international ventures, which appear to have attracted jealousy from certain quarters, who are hell-bent on ensuring that they ruin my business by tarnishing my character and reputation through adverse and orchestrated media publicity and implication with offences that I am stranger to.”

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Kariuki who calls himself a true Kenyan patriot owing to the massive investment he has made across the country was released on a Sh11 million cash bail after he denied all the charges when he presented himself in court on Monday.

About Africa Spirits Limited, the tycoon said he has no executive management over it “and day-to-day operations, whatsoever.”

He said that all the business ventures he has financed remit taxes to the Kenya Revenue Authority (KRA)

“The employment created has a positive impact on many Kenyan families and businesses, directly and indirectly,” he pointed out.

Tycoon, Humphrey Kariuki, Tax
In a statement dated August 19 but released to journalists on Wednesday, the businessman said he is a victim of envious individuals, unsettled by his vast business empire across the world. Pixabay

Kariuki was summoned by the court on August 9 after the prosecution applied for the summonses, when three of his employees were charged with the offence of failing to pay tax to KRA as required by law.

He was away when Peter Njenga, Robert Thinji and Kepha Githu Gakure denied tax evasion charges when they appeared before Nairobi Chief Magistrate Francis Andayi on August 9.

Njenga, Thinji and Gakure were released on Sh11 million cash bail each with an alternative of a bond of Sh20 million.

The court had also issued summonses against Stuart Geraid, Simon Maundu, Africa Spirits Limited, and Wow Beverages Limited.

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The prosecution told the court that the tax period for which the accused persons are said to be non-compliant covered between February 1, 2016 and December 3, 2018.

The court was told the accused – being licensed excise duty manufacturers and registered taxpayers – deliberately failed to file the amount to the commissioner domestic tax by the due dates as required by law.

The accused persons face nineteen counts, which include being in possession of counterfeit revenue stamps, being in possession of unaccustomed goods and conspiracy to contravene section 193 of the East African Community Management Act 2004.

Next Story

Know About the Financial Impact of Abolishing DDT

Why was DDT abolished? How does it affect finance and business? Find out here?

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DDT budget
Earlier effective Dividend Distribution Tax (DDT)was 16.995 per cent on the dividend declared. Lifetime Stock

BY ASHOK SHAH

Earlier effective Dividend Distribution Tax (DDT)was 16.995 per cent on the dividend declared. The tax was then grossed up in Budget 2014 and the current effective DDT rate was 20.56 per cent on the dividend declared. Further resident (non-corporate) shareholders were liable for an additional tax at 10 per cent (plus applicable surcharge and cess) on dividend exceeding Rs 10 lakh. The effective tax rate for Individuals falling in highest tax slabs was 14.248 per cent.

In the Budget 2020, DDT in the hands of the company has been abolished and has been simultaneously substituted with a tax in the hands of the shareholders at applicable tax rate. Additional tax of 10 per cent also has been done away with. The companies declaring such dividend will have to now deduct tax at source (TDS) at 10 per cent on the amount distributed as dividend.

DDT budget
In the Budget 2020, DDT in the hands of the company has been abolished and has been simultaneously substituted with a tax in the hands of the shareholders at applicable tax rate. Wikimedia Commons

Small tax payers would definitely benefit as their effective rate of tax is much lower and would result in substantial saving. Impact on taxation of large retail investors may be negative, as dividend is expected to be taxable at the maximum slab rate in their hands. The effective tax rate for individuals falling in highest tax slabs is 42.74 per cent i.e. there will be an additional burden of 28.492 per cent.

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However, this will promote foreign investment since the foreign investors would now claim benefit under the double tax treaty where the tax rates ranges from 5 to 15 per cent and the same will be available as credit in their home countries. This will result in direct saving of 20.56 per cent for these entities. (IANS)