In Summary
  • The taxman recently served a number of firms with a cumulative bill of Sh116 billion, which Mr Mburu said is part of the quarter trillion shillings in unpaid rates they seek to recover.
  • Kenya Revenue Authority commissioner-general says he will stop at nothing as the agency seeks to recover Sh250 billion from cheats through prosecutions and several other administrative actions.

The taxman is pursuing some of the country’s richest persons as he seeks to recover a whopping Sh250 billion lost through tax evasion in the past two years only.

Newly appointed Kenya Revenue Authority (KRA) commissioner-general James Githii Mburu told the Sunday Nation that the agency was targeting to recover the cash through prosecutions and other administrative actions.

GIVE CAESAR

“This is the amount that we have been able to confirm and verify so far,” said Mr Mburu in his first wide-ranging media interview since being appointed to the post two months ago.

In the exclusive interview on Friday, Mr Mburu, 47, laid bare to the Sunday Nation the extent of the cancer of tax evasion by a few individuals and companies. 

“Tax evasion is bleeding this country to death,” said Mr Mburu, who was appointed to the position in June to succeed Mr John Njiraini, who had served for the past seven years. “We must stop it!”

On Saturday, KRA’s efforts got a big boost from President Uhuru Kenyatta who indicated, in his first public utterances on the issue, that the war on the tax cheats was not about to stop. 

Speaking during celebrations to mark 60 years since the founding of the Christ is the Answer Ministries (CITAM), the Head of State said: “We will continue to say that as long as they continue doing that (evading taxes), Caesar must get his fair share. Why should it go to the pockets of five people?”

Recently, KRA served a number of firms with a cumulative tax bill of Sh116 billion, which Mr Mburu said is part of the quarter-trillion shillings in taxes they seek to recover. Mr Mburu says more arrests and negotiations with tax evaders will follow but declined to say which businesses and sectors are being targeted.

As the Friday midmorning interview went on in a boardroom at KRA’s headquarters at Times Tower, across town at the Milimani Law Courts, his latest suspects in the renewed war against tax evasion were taking plea.

At that time Mrs Tabitha Karanja and her husband, Mr Joseph Karanja, both founders of Naivasha-based Keroche Breweries Ltd, were denying charges of evading taxes amounting to Sh14.4 billion.

UNAPOLOGETIC

Their case follows hot on the heels of another Sh41 billion tax evasion case against billionaire businessman Humphrey Kariuki, who is the proprietor of, among other companies, Africa Spirits Ltd.

Before that, the taxman had slapped 27 betting firms with a tax demand of Sh61 billion, which led the government to suspend their operating licences nearly two months ago.

But it was the arrest of Mrs Karanja and her husband – a couple who through sheer grit built Kenya’s first successful indigenous brewing company against all odds – that elicited uproar from the public and the political class.

A section of leaders from President Kenyatta’s Jubilee Party claimed that KRA is being used to destroy the businesses of a few select wealthy entrepreneurs, especially from Mt Kenya region.

“While there may be tax matters that require redress, it would be an act of utmost betrayal to Kenyans who have built their businesses over the years to be reduced to fugitives,” Nakuru Governor Lee Kinyanjui protested this week. Keroche Breweries is located in his county.

However, Mr Mburu is unapologetic about the crackdown he and his team have embarked on. “There are a few Kenyans who have made tax evasion their business model. We will not spare them,” he said.

He was accompanied to the interview by Ms Elizabeth Meyo, the commissioner for domestic taxes, and Mr Mohamed Ahmed, who is the commissioner for strategy, innovation and risk management.

The CG was agitated by claims that the war on tax cheats is a witch-hunt. “We are not targeting any individual or business,” he said. “We are looking at who ought to pay a certain amount of taxes but is not doing so,” he said.

CONFIDENT

The crackdown on the tax cheats comes at a time when a section of the Jubilee Party leadership is crying foul that the war on corruption has been weaponised for 2022 presidential succession battles.

However, Mr Mburu said the current political climate, especially the handshake between President Kenyatta and Opposition leader Raila odinga, has made his work much easier. “The current politics of the nation is very supportive of what we are doing,” he said. 

He said the actions they have taken in regards to the suspected tax evaders is informed by the intelligence they have gathered over time and are not spur-of-the-moment decisions.

“There are many businesses and individuals who have lifestyles that are not consistent with what they pay. The volumes of the businesses they do is not consistent with what we see in our records,” he said.

Mr Mburu’s appointment for a three-year term by former Finance Cabinet Secretary Henry Rotich comes at a time when the taxman has failed to meet its target for the past financial years.

The taxman, for example, missed the target for the 2018/2019 year ended June 2018 by Sh106 billion, while that for the years ended June 2017 and June 2016 fell short by Sh66.6 billion and Sh12.4 billion.

On Mr Mburu’s shoulders rests the burden of steering KRA to raise Sh2.115 trillion in revenue – up from Sh1.85 trillion last year – to fund the Sh3.1 trillion 2019/2020 budget announced by Mr Rotich in June.

Regardless of the figures, Mr Mburu sounds confident of delivering. “There is enough money in this economy that we don’t even need to borrow loans,” he said. “I know where the money is and I am going for it.”

INTRANSIGENT

This statement is directed at big businesses which he believes are not doing their fair share in contributing towards the baking of the national cake, such as the ones that are already in court.

He said they have recovered Sh6 billion from some of the 27 betting firms whose licences are among those that have been suspended by the government over tax issues.

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