KRA ON TAX EVASION

KRA rejects claims of targeting investors

On the contrary, in new arrests with Keroche Breweries, chief executive Tabitha Karanja said the arrests have been intimidating and were not communicated officially

In Summary

• Kenya Revenue Authority has allayed to concerns that it is targeting individuals and businesses in the increased arrests over tax evasion.

• This follows after arrests of alcohol firm Keroche Industries Limited owners' Tabitha Karanja and her husband Joseph Karanja.

Police arrest Keroche Breweries CEO Tabitha Karanja following DPPs order on tax evasion at the Naivasha based factory on August 22, 2019.
Police arrest Keroche Breweries CEO Tabitha Karanja following DPPs order on tax evasion at the Naivasha based factory on August 22, 2019.
Image: GEORGE MURAGE

Kenya Revenue Authority has denied claims that it is targeting individuals and businesses in the increased arrests over tax evasion.

“Kenyans should reject the narrative that KRA is fighting any individual or business," said the Commissioner-General James Mburu.

He said on the contrary, it has the additional responsibility of trade facilitation under which we support a business environment that is conducive for growth of a business, which further results in increased taxes.

This follows the arrest of alcohol firm Keroche Industries Limited owners' Tabitha Karanja and her husband Joseph Karanja.

Director of Public Prosecutions Noordin Haji on Wednesday evening ordered their arrest over tax evasion claims amounting to more than Sh14 billion.

However Keroche chief executive Tabitha Karanja said the arrest was aimed at harassing and intimidating them as amount stated to be unremitted was baseless and without facts.

"To this point, I have not received any formal communication from the DCI's office nor any earlier investigation from the office of the DPP pertaining this matter,” Karanja said.

Keroche claimed the pending dispute with the exchequer was on on the applicable rate on one of their product Vienna Ice ready to drink vodka saying the matter was ongoing at the tax appeal tribunal.

Last week, KRA launched a tax investigation and prosecution strategy that aims to recover unpaid taxes which will be executed with help of 11 prosecutors from DCI.

KRA will carry out surveillance on the taxpayer’s business premises, residences, tax agent’s premises, third parties and other premises as may be necessary.

The arrest also follows KRA's target to prosecute 600 tax evaders in the financial year that began July 1.

In the last financial year ending June 2018, KRA prosecuted 223 individuals.

“All we desire is that all eligible taxpayers make every effort to pay their rightful share of taxes. We must all contribute in an equitable manner to the development of our Country,” KRA added.

KRA said it is determined to pursue those who have deliberately chosen to evade paying taxes through non-disclosure of fully earned income  and mis-statement of expenses to reduce the taxable income. 

These also include those who failure to pay the correct import taxes through concealment of goods, mis-declarations and undervaluation among other schemes and failure to withhold and remit taxes as required by law .

“It is our intention to ensure that all persons who are required to pay taxes do so for the good of this country. We shall treat all taxpayers with respect and afford them the desired level of services,” it added.

KRA has also it will also commit to weed out dishonest staff in the procedure.