KRA accuses Chinese firm of hiding cash in Hong Kong to evade tax

The Kenya Revenue Authority wants the High Court to freeze four bank accounts owned by Chinese phone maker X-Tigi on suspicion that the firm has been evading taxes and stashing proceeds from its business in Hong Kong.

The taxman says in court filings that X-Tigi has been grossly under declaring income tax due to the KRA from sales, and has not been remitting PAYE.

Detectives from the taxman’s office say they are investigating X-Tigi and its director Gao Fei— a Chinese national-—on tax evasion charges and may transfer all its funds held at four Equity Bank accounts.

Neither Mr Fei nor X-Tigi have responded to the suit. Justice Francis Tuiyott on Friday ordered that the KRA and X-Tigi seek a hearing date at the registry.

“Mr Fei has never filed returns or any taxes yet he earns income and runs a US dollar account with considerable deposits. There has been regular funds transfer to a bank account in Hong Kong suspected to be income derived from the business. The director and agents of X-Tigi are Chinese nationals hence there is a high risk of them leaving the country without payment of taxes found due after the assessment or frustrating the recovery of taxes,” says Asenath  Obaga, a KRA investigator.

The taxman believes a probe on X-Tigi’s four bank accounts held at Equity Bank will help reveal just how much the firm owes in taxes.