KRA raids ex-Minister’s city hotel over Sh400m

The late Njenga Karume

NAIROBI, KENYA: The controversy surrounding the estate of the late Cabinet Minister Njenga Karume took a new twist on Friday when the Kenya Revenue Authority swooped in on his flagship business- Jacaranda Hotel.

The taxman is claiming over Sh400 million tax arrears that have accumulated for the last three years as Karume’s children battled in court over a trust which was formed to run his business holdings.

According to Jane Mukuhi Karume, the daughter of late minister, KRA had moved to lock up the premises after the trustees failed to show any repayment plans for the accumulated sum. She claimed her intervention alongside her brother Samuel Wanjema Karume saved the day.

They raised Sh75 million as a down payment to strike a repayment agreement with the taxman. This then spared the assets of the hotel from the auctioneers.  

“The hotel is managed by a trust. We didn’t even realise there was a problem until mid-last year. The management was filing returns but were not remitting the money,” Ms Mukuhi said.

She said Jacaranda Indian Ocean Beach Resort and Jacaranda Lake Elementaita Lodge, which are also managed by the same trustee are also in arrears with the latter owing taxman about Sh4 million.

The trustees are Mr George Ngugi Warieri, Mr Kung’u Gatabaki and Ms Margaret Nduta Kamithi. Sources close to the trustees however gave a different version of the events. They said the KRA bill is not one under the trustee’s management. “The trustees have tried to turned around the businesses,” the source said.

They said the numerous cases filed in court have made it impossible for the trust to operate. The arrears are in form of Value Added Tax which is paid by customers on the meals and the hotel is supposed to remit the collected amount every month. However, according to KRA, Jacaranda has failed on this.

In December, as KRA came knocking, Mukuhi said the family sold land at Sh214.5 million. Last month, the hotel had filed an urgent application at the Milimani High court when KRA demanded for the tax arrears at once. Then, KRA was demanding Sh197 million.