James Mwangi Macharia, a prominent Nyeri businessman and director at Nyika Pharmaceutical Limited, was on Thursday granted a Ksh. 10 million bond after being arraigned in the Nyeri Law Courts on charges of tax fraud totaling Ksh. 35,996,021. Macharia, alongside his company and fellow director Emmah Wangari Mutha, faces multiple counts of tax evasion for failing to declare income between 2016 and 2019.
The charges, presented before Principal Magistrate Cheruto Kipkorir, indicate that during the specified period, the accused individuals failed to disclose substantial income amounting to Ksh. 146,935,360. Additionally, the company allegedly failed to declare income of Ksh. 89,188,317 in 2020, earned in 2019. They are also accused of underreporting Value Added Tax (VAT) for the years 2017, 2018, and 2019, amounting to Ksh. 8,620,690, Ksh. 22,868,319, and Ksh. 26,258,034 respectively.
Despite the gravity of the charges, Mwangi denied all allegations of tax fraud. His co-director, Mutha, was notably absent from the court proceedings, with an active arrest warrant issued for her due to similar offenses. The matter has been scheduled for mention on April 29, 2025, giving the parties time to prepare for the upcoming legal proceedings.
The accused individuals face potential severe penalties if found guilty. In line with the Tax Procedures Act, they could be fined up to Ksh. 10 million, double the amount of tax evaded, or face a prison term of up to five years, depending on the severity of the charges. The case has raised concerns over tax compliance, with the Kenya Revenue Authority (KRA) reaffirming its commitment to dismantling tax evasion schemes.
The KRA’s Investigations and Enforcement Department emphasized that it would continue its efforts to enforce tax laws and promote market integrity. This case serves as a reminder of the importance of transparency and compliance in the business community, with the authority determined to hold offenders accountable and safeguard Kenya’s fiscal health.
