Attention has shifted to the taxman’s office, whose staff continue to walk free as investigating agencies unearth billions of shillings in tax fraud.
The Nation has learnt that a Chinese construction company could have been allowed to pay Sh600 million tax instead of Sh2 billion, thanks to the recommendation of a senior Kenya Revenue Authority (KRA) official on the basis of “good relations between Kenya and China”.
The matter, currently under investigation by the Directorate of Criminal Investigations (DCI), is one of the many that detectives are trying to decipher as they attempt to find out the companies that were assisted by a tax evasion ring that for years operated from Times Tower.
But in what appears to be a one-sided war against tax cheats, law enforcement agencies have shut down betting firms, and have now trained their guns on top alcohol firms but left out KRA officials who helped the alleged tax cheats.
In the past month, KRA has slapped firms with a cumulative tax bill of Sh116 billion, demands that could cripple some, if not all, of the firms.
Ironically, some of those targeted in the tax raids, including betting firm SportPesa and billionaire Humphrey Kariuki’s empire, were awarded certificates celebrating them as top taxpayers by the agency that has now turned against them.
Unlike the previous raids, which saw the Director of Public Prosecutions (DPP) go for both government agencies and private companies in the fight against corruption, only private firms have been singled out, and are feeling the heat in the fight against tax evasion.
Keroche boss Tabitha Karanja, who is facing a Sh14.4 billion tax evasion charge, is the latest to accuse the taxman of selective and unfair targeting, arguing that she has always followed the law and was shocked to be accused of tax evasion when the matters were still under a tax tribunal.
“There is nowhere in the world where you can build a business having complied all through and still be subjected to such embarrassment and intimidation,” Mrs Karanja said, protesting her arrest and that of her husband Joseph.
“We are deeply shocked by both the allegations and the manner in which the matter has been handled. My shock is how a local investor can be humiliated, embarrassed and denied well-deserved respect,” said Mrs Karanja.
Betting companies have in the recent past also accused the taxman of giving them tax compliance certificates only to turn around later and accuse them of tax crimes.
Mr Humphrey Kariuki, who has been charged with Sh41 billion tax evasion, claims the charges have been orchestrated by jealousy due to his businesses outside the country.
“I affirm that I have no outstanding tax dispute with the Kenya Revenue Authority, and that I do not manage any company that has a tax dispute with the KRA,” he said.
The KRA is demanding Sh61 billion from 27 betting firms whose licences were suspended last month, Sh41 billion from African Spirits and the Sh14 billion from Keroche.
On Thursday, the agency was under sustained fire for being treated as a sacred cow, despite overseeing the tax fraud.
In response, KRA Commissioner General James Mburu asked Kenyans to reject the narrative that the authority is fighting individuals or businesses.
“The majority of KRA staff are honest and committed to supporting Kenyans in paying their taxes,” he said in a statement.
“We are committed to weeding from our midst those who abuse the privilege Kenyans have bestowed on us by engaging in corrupt conduct and by failure to provide taxpayers with the desired level of services,” he added.
The KRA said it had set up mechanisms for identifying and investigating staff who aid tax evasion and was subjecting them to internal disciplinary processes.
“We are also working with other law enforcement agencies in ensuring that those staff who aid tax evaders are prosecuted jointly with the taxpayers they have aided,” KRA said, but gave no details on the number of staff involved.
Mr Mburu said his agency has grown tax collection from Sh201 billion in the 2002/03 financial year to Sh1.58 trillion in 2018/19, representing a growth of over 680 per cent.
“This has enabled the country to continue providing the much-needed services to the Kenyan people,” he said.
The agency noted the growth demonstrates that Kenya will significantly reduce its reliance on debt if everybody required to pay taxes does so.