The preservation notice was issued in respect with accounts from NIC Bank, Standard Chartered Bank and Bank of Africa.
The agency wants court to overturn orders issued on 4th of October staying KRA decision dated 21st September, 2018.
KRA argues that if the orders are not set aside and funds are siphoned out, the taxman will have nothing to hold on since HouseMart has no known assets in the country adding that the owners or directors are foreigners.
“If stay orders are not reviewed , discharged or set aside is prejudicial and has denied the Commissioner of Investigation and Enforcement, Commissioner of customs and Excise and KRA opportunity to preserve the funds to secure taxes”. KRA state.
Similarly the tax collector argues that the order as crafted allows the applicant to access the funds in the various banks where the KRA placed the preservation Notices.
HouseMart Company Limited moved to court few days after one of its company directors was charged in court.
Director Ye Wel and HouseMart Company Limited were accused on diverse dates between 1st January, 2017 and 30th June 2018 with others not before court, being Housemart Company Managing Director willfully defaulted in paying Kshs. 154,328,071.
Kenya Revenue Authority further accused Ye Wei and the company for willfully defaulting in paying Kshs. 583,353,575 being income tax payable to the commissioner of Domestic Taxes in contravention of the said Act.
The are also accused of defaulting to pay Kshs. 85,082,282 between January 2015 and 30th June 2016.
He however pleaded not guilty to several counts and was released on a cash bail of 1 million and a bond of 2 million.
In the court documents KRA says while giving the order , judge didn’t give any condition as to what security for the taxes that may be established or per the preliminary findings dated 21st September 2018 for the sum of Kshs. 2,243,781,488,78.
“Housemart Company Limited has no known assets or other chattels from which the respondent can recover the tax in the event that amount in respect of tax is not remitted to the respondents”. Said Kenya Revenue Authority.
The agency further argue that, housemart has been under declaring sales and claiming input VAT fraudulently thereby suppressing the tax payable.
In the affidavit sworn by Cyrell Wagunda, the agency says they have sufficient grounds to believe that Housemart is engaging in tax evasion and the violation of tax statutes.
He accused Hoursemart of creating a facade or acted as a facade for other parties who have no physical presence in Kenya leading to monies earned being remitted to other countries without subjecting the same taxation in Kenya.
” The fact that Housemart Limited is acting as such, the beneficial owners are Chinese Nationals and a flight risk and on the ground of Commissioner Investigation and Enforcement issued preservation Notices to several banks where it is suspected that Housemart had funds to preserve the said funds pending the issuance of tax assessment and recovery of the taxes” KRA told the court.
KRA further told the court most of the directors listed includes those of the Housemart are foreigners and corporations with foreign addresses in foreign jurisdictions which are suspected to be tax havens making it difficult to repatriate the funds once they exit Kenya borders.
The Chinese firm deny any link with the companies that received the cash on its behalf, noting that some of them are its suppliers.
The firms are Colila Limited, Akubi Limited, Nkemm Limited, Obeset Kenya Limited, Sunda (Industrial) Company Limited and Wise Databank Limited.
KRA claims that the mentioned companies were registered by HouseMart Co Limited.
The case will proceed next week before Lady Justice Pauline Nyamweha.