Lamu MP West Stanley Muthama has denied 13 fraud and tax evasion counts.
Muthama and his company, Stansha Limited, appeared before Eldoret chief magistrate Charles Obulutsa accused of making false tax returns in which the state lost Sh487,914,642.
His company traded mainly in Kericho, Kajiado and Nakuru counties and failed to pay tax VAT and PAYE between 2013 and 2017.
The MP was released on a Sh3 million bond or Sh500,000 bail. The case will be mentioned on July 15.
Prosecutor Sheila Sanga told the court, “Your honour this is a very serious case of tax fraud that affects the functions of the state and it’s a case of great interest to Kenyans that also amounts to economic sabotage."
Muthama was represented in court by lawyers Nathan Tororei and Jane Masai.
One of the charges was that he, his company and others not before court, being registered taxpayers and in receipt of income derived from business activities in Kericho, Kajiado and Nakuru counties in relation to the year 2013, knowingly made incorrect statements in the income tax company returns of Stansha Limited which affected the tax liability of Sh12.7 million.
Another charge is that he, being in receipt of income from business activities in the three counties in relation to the year 2016 he made a false entry of tax returns for Stansha Limited which affected the tax liability by Sh138 million.
Yet another says that he made incorrect returns for his company which caused a tax liability of Sh6.9 million in 2013.
He is also accused of omitting Sh2.1 million PAYE returns of the employees of his company in the year 2015. He omitted PAYE returns of Sh2.06 million for his employees the following year.
In 2017, Muthama is accused of knowingly omitting from VAT returns of Stansha Limited Sh44.1 million.