KRA targets Sh53 billion from tax evaders

Kenya Revenue Authority is targeting to collect Sh53 billion lost in tax evasion from 118 cases presented to court since January.

Speaking to journalists yesterday, KRA’s commissioner  for Investigations and Enforcement David Yego said they are collaborating with local and neighbouring country enforcement agencies to deal with the growing cases of illicit financial flows.  

He said the agency is plans to charge 600 suspected tax evaders this year as it moves to recover lost revenue.

"We are targeting Sh53 billion from cases already in courts. We have declared war on tax cheats who continue to deny us much-needed revenue,’’ Yego said.

He added that KRA is reviewing some of tax agreements Kenya has with other countries in order to seal loopholes that aid illicit financial flows like transfer pricing and tax avoidance.

‘’East Africa Community continues to lose much-needed revenue courtesy of loose legal channels like double tax agreements. Tax investigators are going to screen them to ensure that no revenue is lost,’’ Yego said.

He was speaking during the East Africa Regional Meeting for Commissioners of Investigation and Enforcement in Nairobi that attracted delegates from Kenya, Uganda, Rwanda, Burundi, and Tanzania.

According to the Africa Tax Justice Network, Kenya has been losing $400 million (Sh40 billion) every year since 2011 through illicit financial flows.

This, even as KRA continues to miss its tax targets, forcing the government to turn to borrowing to fund annual budgets.

Last year, the taxman missed its target by Sh250 billion, collecting Sh1.44 trillion against its original target of Sh1.69 trillion.

The huge deficit of 7.4 per cent forced National Treasury to borrow a massive Sh891 billion during the period, pushing up the country’s public debt to Sh5.8 trillion by the end of 2018/19 financial year.

The amount lost through tax evasion this year so far is slightly over a quarter of what KRA missed last year. The taxman is expected to collect Sh1.8 trillion in the current financial year.

Oxfam International estimates that Africa loses at least $50 billion every year in illicit financial flows; amount higher than what the continent receives in foreign aids annually.

KRA has in recent times upped the ante in the hunt for tax evaders, with billionaire businessman Humphrey Kariuki and proprietors of alcohol firm, Keroche Joseph and Tabitha Karanja arraigned in court.

The founder of Africa Spirits, the alcoholic beverage maker at the centre of suspected Sh41 billion tax frauds, has since distanced himself from the management of the firm, so are Keroche owners.