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  1. http://www.standardmedia.co.ke/mobile/amp/article/2000223004/here-s-why-kra-is-demanding-sh3-4-billion-from-zuku-owners
    business/article/2000212131/zuku-s-multibillion-taxing-question

    INVOLVEMENT OF THE UNITED STATES GOVERNMENT INVESTMENT ARM IN CLASSICAL CASE OF TAX EVASION
    JUDICIAL REVIEW MISCELLANEOUS CIVIL APPLICATION 292 of 2016.
    Richard Bell vs. Kenya Revenue Authority
    The news to the million of Zuku customers their service provider is battling is involved in past under hand dealings leading to tax leakage of 3.4 billion was not received well as in their eyes, they know wananchi as a local company and woud expect that it pays its fair share of taxes in Kenya. The revelation was first made by the Standard newspaper where it reported that Wananchi group owners are fighting an “eye watering” tax bill in courts vide a Judicial Review Miscellaneous Civil Application 292 of 2016. Bell if fighting the KRA for serving the bill on him.
    Incorporation in a Tax Haven and No Economic Substance
    The dispute stems from the structure of R. Bells companies which though run from Kenya are incorporated in Mauritius which has been regarded as a tax haven in the world. The taxman has zeroed down on three companies namely Wananchi Group Holdings Limited, Wananchi Satellite Limited and Wananchi Programming Limited ,that is the Wananchi companies, all of which are incorporated in Mauritius but have no office, staff or assets in Mauritius and no national economic substance save for the selfish economic motive by the proprietors. However, this is not unique to these Wananchi companies only. A close scrutiny at any rich Kenyan or most Kenyan linked multinational reveals that they have dealings with a Mauritius based related party entity in a bid to minimise their tax liabilities in Kenya. To succeed in this, these companies would offer purport to offer management fees to Kenyan companies hence reduce the Kenyan company taxable income. The foreign based company could also borrow on behalf of the Kenyan company and as such, any loan repayments would escape withholding tax in Kenya. The entity could also be involved in

    Trident Trust Services Limited (“TTS”)
    In an attempt to avoid the eye of the taxman, Richard and associates decided to employ the services of TTS Mauritius to incorporate WSL,WPL and WGHL. TTS styles itself an independent provider of corporate, trust and fund services to the financial services sector worldwide by offering clients access to a range of services that extends from traditional corporate domicile representation to the administration of complex trust and fund structures. The company has positioned itself in tax havens like Panama, Bahamas, Isle of man, British Virgin Islands and its services are akin to the ones offered by the troulesd law firm in Panama, Mossac Fonseca.
    You would be forgiven for assuming that coming up with a tax evasion scheme is something of secrecy. Shockingly, this is an art that TTS has perfected so well and perfects it through incorporating shell companies for its clients in the tax havens in which it operates. It only takes a phone call and USD 1,000 to buy a company off the shelf from Trident trust. You can then run business in Kenya through a foreign incorporated company, so long as the tax man is not aware. For companies in the services sector, this is very easy as there is no physical movement of goods. Just as is with Wananchi case, what you need is an active Kenyan company that is fronted in Kenya as a genuine tax paying entity. However, within the operations of the Kenyan company, have some operations run relating to the foreign incorporated companies from that office. The crafters such schemes then ensure that the income from such operations is booked at the foreign based paper company. These companies pretend that they are headquartered in Mauritius with the tax benefits associated with having a principal address in a tax haven thus escaping taxation in Kenya.
    They will then offer you with services of directorship. It is no secret that even the individuals used for the directorship are an open book secret. These are Mr. Randhirsingh Juddoo and Mr. Ashraf Ali Deenmahomed. It is the ame individuals that JRA claims that Bell and cronies have used to run their sham web of companies.
    In taxation realm, Residence is different from Incorporation
    For tax purposes, a company might be incorporated in Mauritius but its taxed in Kenya. This is based on where its management and control through a concept known as tax residence or through profit attribution to the Kenyan operations as a permanent establishment. A company may be able to easily navigate through these two concept but it needs at its disposal a good team of tax experts and tax lawyer. However, in Kenya, such expertise is limited. This would explain why despite having tax consultants and accountants, no one has ever pointed to Wananchi owners that it was a matter of time before the taxman busts their scheme.
    East African capital Partners Limited (“EACP”)
    EACP acts as the nerve centre of Wananchi group of companies. EACP was incorporated on 10th March 2005 in Kenya and has invested in Wananchi Group through ATMT Fund. The Partners of EACP are Jimnah Mbaru, Richard Bell, Mark Schneider, Richard Essex, and Ali Mufuruki. EACP manages the empire from Nairobi through its CEO, Mr Richard Bell, probably explaining why KRA decided to serve the tax bill on him.
    Moral Question about the Involvement of Bankers, Investors and Auditors
    Wananchi case appears like it may be KRA’s biggest win against ever on unmasking how unscrupulous business men abuse Kenya’s tax laws to launder money and evade tax. Its legal tussle with Richard Bell/Wananchi companies raises a moral question on the culpability of investors, auditors, bankers and lawyers in tax planning. To succeed in a tax evasion or tax planning scheme, services of these sets of people are always involved. The role these third party entities in tax evasion and other malpractices has always been a hot topic for decade worldwide. Their role in the Wananchi case should therefore investigated.
    Is the United States Gorvernment a partner in Wananchis tax Evasion?
    The United States government, through its investment arm, Overseas private Investment Corporation(‘OPIC”) are at the mix of Wananchi tax tussle with KRA. As the biggest investors in Wananchi Group holdings, one wonders what due diligence they did to ensure that the companies are operating above board and that they comply with all the tax laws in the countries they operate in. It would be inconceivable that the American government is not aware that Wananchi Group of companies are involve in a tax scam. Maybe Americans preach water and drink wine. It is also shocking how the Obama administration has allowed itself to be drawn into a dirty game of one of the worst crimes in the world, Tax evasion. This should be condemned in no uncertain terms. It would also be interesting to know how the US government ensures that the projects it invests in do ot get money from terrorists.
    Use of Trust companies to Launder Money and Evade Tax
    One of the easiest ways of laundering money and evading tax is opening a company using the likes of TTS and Mossac Fonseca. Then you can use their secretarial and directorship services so that you hide the true owners and even go ahead and even allow them to operate your bank accounts for the foreign companies, of course at a fee. These fund administrators are also used by the wealthy to clean their money directly by pooling funds from various sources and thereafter investing in companies across the globe. They achieve this through a equity funds. From the documents filed in court, I would bet my life that the monies used to fund Wananchi by some of its investors is all from clean sources. Othersise one would wonder why the owners choose to incorporate in Mauritius though the operations of the companies are in East Africa.

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