TRA probes EPA companies THISDAY REPORTER Dar es Salaam TANZANIA Revenue Authority (TRA) is investigating the tax records of a string of companies that received payments totalling more than 133bn/- from the Bank of Tanzanias external payment arrears (EPA) account during 2005/06. According to latest THISDAY findings, TRA officials are conducting an in-depth investigation in an attempt to recover possibly billions of shillings in unpaid tax from the EPA beneficiary companies. Insiders say the tax investigation currently under way could expose massive tax evasion and money laundering reportedly carried out by owners of some 22 companies that received EPA funds. Tax experts explained that such an assessment was usually carried out by TRA when companies fail to lodge tax returns or submit incorrect information to the revenue authority. A tax investigation can also be ordered when companies fail to provide information requested by TRA or post tax returns with an unreasonably low turnover, said an official familiar with the tax investigation. Well-placed sources said TRA may also be conducting the tax investigation following some of the recommendations of the report of the special audit on the EPA account carried out by the international audit firm, Ernst & Young. Officials close to TRA investigators say the assessment is expected to be done through field visits to the companies premises, examination of the books and records of the companies and enquiries to check the bank records of the companies. The tax investigation by TRA could ultimately lead to the prosecution of suspects if confirmed that the companies were involved in tax evasion, said another source. Several beneficiaries of the illegal EPA funds are shell companies, which were formed specifically for the sole purpose of stealing huge amounts of funds from the BoT and remained idle after the funds were withdrawn from their bank accounts. Such companies have no independent assets or operations of their own, but were used by their owners to conduct specific business dealings. The now-infamous Kagoda Agriculture Limited is one typical shell company, which was used by its mystery beneficiaries to loot more than 40bn/- from the key BoT account. Some of the 22 companies involved in the EPA scandal are Bencon International Limited, VB & Associates Company Limited,� Bina Resorts Limited, Venus Hotel Limited, Njake Hotel and Tours, Maltan Mining Company Limited, Money Planners and Consultants and Bora Hotels and Apartments Limited. Others are B.V. Holdings Limited, Ndovu Soaps Limited, Navy Cut Tobacco (T) Limited, Changanyikeni Residential Complex Limited, Kagoda Agriculture Limited, G&T International Limited, Excellent Services Limited, Mibale Farm Liquidity Services Limited, Clayton Marketing Limited, M/S Rashtas (T) Limited, Malegesi Law Chambers (Advocates), Kiloloma & Brothers and KERNEL Limited. Sources say the tax assessment on the EPA companies was being conducted by officials from TRAs Tax Audit and Investigations Department and the Domestic Revenue Department. Functions of the investigations department include investigating criminal violations on tax laws and recommending prosecutions. TRAs Commissioner for Domestic Revenue, Joannes Mally, and the tax authoritys Director for Taxpayer Services and Education, Protas Mmanda, confirmed that the tax investigation was under way, but declined to give further details. Right now, this issue is under investigation, so I cant jeopardise the ongoing investigation by releasing sensitive information, Mmanda told THISDAY when asked to reveal the amount of unpaid taxes involved in the probe.