By Dorothy Musyoka
The Milimani Law Court has today convicted and sentenced a Chinese national, Mr. Cai Rongui, to pay a fine of Ksh. 6 million for fraudulently defaulting to declare income and Value Added Tax (VAT) for the years 2018 and 2019.
The conviction follows successful prosecution by the Office of the Director of Public Prosecutions (ODPP).
Mr. Cai, the beneficial owner of Yiyuan Trading Company Limited, faced four counts of tax fraud under Section 97 (e) as read with Section 104 (3) of the Tax Procedure Act, 2025. The court imposed a fine of Ksh. 1.5 million for each count, totalling Ksh. 6 million.
According to the prosecution, led by Counsel James Gachoka, Mr. Cai unlawfully and deliberately failed to declare income amounting to Ksh. 48,670,050 for 2018 and 2019, as required under the Income Tax Act CAP 470.
He was also found guilty of failing to declare VAT amounting to Ksh. 162,233,500, thereby affecting VAT liability of Ksh. 25,957,360, as per the Value Added Tax Act CAP 35.
“On the 31st day of June 2019, in Nairobi County, within the Republic of Kenya, being the beneficial owner of Yiyuan Trading Company Limited and a limited liability company, unlawfully and deliberately defaulting to declare income for the year 2018 and 2019 to the commissioner as required by the Income Tax Act CAP 470 laws of Kenya, thereby affecting income tax liability of Ksh. 48,670,050,” the ODPP explained.
“He is also accused of failing to declare Value Added Tax of Ksh 162,233,500 to the commissioner as required by the Value Added Tax Act CAP 35 laws of Kenya, thereby affecting Value Added Tax liability of Ksh. 25,957,360,” added the ODPP.
The offenses, which occurred on June 31, 2019, in Nairobi County, were confirmed through evidence presented by two prosecution witnesses.
The court found the accused guilty of deliberate tax evasion, which deprived the government of significant revenue.