The Internal Revenue Commission (IRC) has commenced prosecution against Eke Lama and Pora Lama, owners of Yumi Yet Construction Ltd and Yumi Yet Real Estate Ltd over possession and false declaration of a fraudulent Certificate of Compliance (COC). The prosecution was instituted under section 354 (T) (b) (e) of the Income Tax Act 1959.
It was alleged that around August 2021, the offenders and persons associated with Yumi Yet Construction Ltd presented to the National Procurement Commission (NPC) a fraudulent COC to qualify for a minor works contract.
The NPC suspected that the COC was fraudulent and swiftly contacted the IRC to verify whether the purported COC was genuine.
IRC confirmed that the COC was fraudulent hence commenced the proceedings. If the Court finds the duo guilty, they could end up paying a fine of up to K50, 000 or an imprisonment term of 12 months or both.
This case follows the successful prosecution of a former officer of IRC and a taxpayer a few weeks ago for COC fraud. The prosecution initiated under the Income Tax Act, such as this, does not bar the Commissioner General from pursuing similar charges according to the Crime Code Act.
COC’s are system generated off the SIGTAS system if the compliance level of the taxpayer is up to date. If the taxpayer has outstanding compliance issues, the system does not print a COC.
The IRC is clamping down on corrupt officers who go beyond and outside their duties, collude with taxpayers, produce fraudulent documents and receive kickbacks for their services. The Commissioner-General, Sam Koim, has continuously stressed that officers and taxpayers involved in dubious conduct will be investigated, prosecuted, and face stiffer penalties through hefty fines and imprisonment under the relevant tax laws.
