Business has been a challenging endevour for a lot of people. While the Kenyan economy is booming, things on the ground are different: tens of companies have been forced to let some of their workers go in the process of streamlining operations, the latest culprits being from technology and financial organizations (Telkom and KCB). Amidst hard choices that are often pursued to remain operationally afloat, some business leaders have successfully or otherwise evaded the tax net spread by the tough executives at KRA. And the repercussions are often unforgiving for those who fall victim to the taxman’s stringent whip.
The latest culprit is one Gao Fei who serves as the Director of New X-TIGI Technology company Limited that sells phones (both smart and dumb) and phone accessories. Mr. Fei, apparently, is charged with three counts of failure to submit tax returns and pay taxes amounting to a healthy KES 194 million. The amount is substantial, but let’s remember X-TIGI is a big name, especially to a specific demographic in Kenya: it sells some feature phones that offer more than the competition has in place in terms of value for your buck. Their phones are popular for folks who can do just fine with a dumb device that has excellent battery life, and additional features like a radio and a torch. X-TIGI has mainly done a good job selling their devices, and while we do not have sales numbers from the company, our guess is their local business has not been bad.
Gao Fei, who was summoned at Milimani, was released yesterday on a cash bail of KES 150,000 and a surety of one million bond. He was ordered to leave his passport with the courts in case he gets creative and cross the border to his home country in Asia. The case will be reopened on September 26.
KRA has been zeroing in on businesses that are suspected of skipping paying their fair share of tax. Recent events have seen the institution push for its due after the arrest of high profile business executives such as Humphrey Kariuki and Keroche Breweries owners.