(NAIROBI, KENYA) – Kenya has charged three traders over a KES 3.9 billion ($30.2 million) value added tax fraud scheme that used fictitious electronic invoices worth about KES 25 billion ($193.8 million) over five years, with prosecutors seeking more suspects.
The court heard that the three traders were part of a larger group of businesses investigated by the Kenya Revenue Authority over alleged fraudulent tax declarations.
“We have identified the businesses through which the government has lost the much needed revenue to finance its activities,” KRA Deputy Commissioner Sheila Sanga told the court at the start of the prosecution of the three suspects.
Ms Sanga, who led the prosecution, said investigators had identified the alleged masterminds of the fraud, including KRA employees.
KRA chief investigations manager Sylvester Okello presented the suspects before the Magistrate’s Court.
The accused, Dorothy Gacheri Kimathi, Jefferson Wachira Nyota and Lucy Njeri Nyota, denied charges of making false declarations relating to VAT payable on purchases allegedly made through their companies.
Ms Kimathi was charged alongside her company, Njempta Agencies Limited, while Mr Nyota was charged alongside Jeffla Construction Limited.
The prosecution told the court that, on various dates between 20th December 2024 and 20th January 2025, in Nairobi, Ms Kimathi allegedly made false declarations by claiming to have purchased goods worth KES 2,852,672 ($22,113) from Aiselev Enterprises Limited.
The declaration allegedly reduced her VAT liability, resulting in a loss of KES 456,428 ($3,538) in revenue to KRA.
Kimathi denied the charge and applied to be released on bail, arguing that the offence was bailable and that bail was her constitutional right.
Nyota, through Jeffla Construction Limited, was accused of falsely declaring purchases of materials worth KES 3,329,145 ($25,807) from Hadsem General Supplies Limited.
The prosecution alleged that the VAT declaration submitted to KRA resulted in a revenue loss of KES 532,663 ($4,129).
In a separate charge, Nyota, Lucy Njeri Nyota and Jeffla Construction Limited were accused of taking part in a tax fraud scheme that allegedly cost KRA KES 548,337 ($4,250) in revenue.
The court heard that, between 1st July and 31st July 2022, the accused, acting as directors of Jeffla Construction Limited, a registered KRA taxpayer, allegedly made false declarations by claiming to have purchased goods worth KES 3,427,105 ($26,566) from Namtek Transporters Company.
The prosecution alleged that the accused knew the declarations were false and that they reduced the company’s VAT liability, resulting in a loss of KES 548,337 ($4,250) to the government.
KRA prosecutors also informed the court that the Director of Public Prosecutions had approved the prosecution of five other traders and 12 companies linked to an alleged scheme to defraud the government of about KES 3.9 billion ($30.2 million) in VAT.
The prosecution did not oppose the release of the suspects on bail, saying the offences qualified for bail and that the accused were entitled to seek bail under the Constitution.
In a brief ruling, the court released Ms Kimathi on a cash bail of KES 150,000 ($1,163), while the Nyotas were granted bond of KES 200,000 ($1,550) each.
The magistrate also issued arrest warrants for suspects who failed to appear in court to face prosecution.
The case will be mentioned on 16th October 2026 for further directions.