Taxman unlocks Sh1.65 billion from 367 taxpayers disputes

Kenya Revenue Authority Commissioner General Githii Mburu when he appeared before the Public Investments Committee (PIC) on the Special Audit Report on Utilisation of COVID -19 Funds. [Elvis Ogin, Standard].

The Kenya Revenue Authority (KRA) unlocked Sh1.65 billion from 367 taxpayers that it had been investigating since July last year.

This is out of the total value of Sh6 billion that it sought to get from the cases. The taxman has so far prosecuted 125 of the cases.

Justus Kiuvu, the Chief Manager in charge of dispute management and enforcement, said some of the money was paid before the prosecution was launched.

“Out of these 367, a lot of them just opt to pay upon investigation,” said Kiuvu.

However, he noted that there are still some hardcore taxpayers who were pushing their luck in the tribunal and courts “hoping that five or 10 years from today they will still be arguing in the courts.”

Consequently, he added, KRA has taken the route of alternative dispute resolution to avoid the lengthy court process.

“Because, does the Commissioner want his taxes today or 10 years from today? He wants his taxes today.”

This is the first year that the KRA’s investigation and enforcement department was being given a target.

“We are not in there for the money. We are in there for the bigger picture of safeguarding the tax administration system,” said Kiuvu.

Contrasting the Sh1.65 billion that the investigations and enforcement department has so far collected against KRA’s target of Sh1.8 trillion, Kiuvu described the target they are given as a “drop in the ocean.”

KRA, as part of the multi-agency taskforce that also includes eight other agencies, has been following up on some very high profile cases.

Recently, the High Court threw out a Sh17 billion tax evasion case against businessman Humphrey Kariuki, noting that the police overstepped their boundary in charging the brewer and seven others.

KRA has been accused of witch-hunt with Deputy President William Ruto, who wants to replace President Uhuru Kenyatta in the August 9 elections, arguing that it has been used by the State to silence government critics.

“They have weaponised State institutions, the Directorate of Criminal Investigations (DCI), KRA and the Ethics and Anti-Corruption Commission (EACC) to run political errands. To dismantle businesses that belong to people who do not worship them, and I want to tell them, this country will change,” Ruto said on March 16 during the during the UDA National Delegates Conference (NDC) when he received a nod to be the party’s flag bearer in the upcoming polls.

He added: “On our first day, we will free the DCI and the KRA from State capture.”

However, KRA insisted that political inclinations are not part of their criteria for selection of cases to pursue.

“We cannot go for political inclination. Otherwise, we lose the fight of building confidence among our customers,” said Dominic Kengara, KRA’s chief manager in charge of case and quality management which is under the investigation and enforcement department.  

However, personalities involved, such as persons who enjoy or previously enjoyed public trust to protect revenue, including politically exposed persons, are on the taxman’s radar.

One of the high profile cases that KRA has recently handled included the Sh9 billion dispute with Keroche Breweries. 

Kiuvu noted that the taxman has also started targeting the real estate sector alone in its investigation, noting that the sector faces a lot of challenges.

“With the kind of interactions we have had in this sector, we realized it is a very risky sector in terms of revenue,” he said.