Is KRA Being Used To Fight Local Investors In Kenya?

By Soko Directory Team / August 23, 2019



Tax

“Justice is for dynasties. The law id for hustlers. Humphrey Kariuki and Tabitha Karanja are hustlers who made it. They must face the dirty law. Not justice. Now I wonder: Who is next from the house of hustlers?” said political analyst and commentator Mutahi Ngunyi through his Twitter handle.

“Humphrey Kariuki saga does not add up. Raila committed high treason. They made him high representative to AU. All animals are equal but dynasties are more equal than others,” he added.

“What is happening with KRA, DCI and the whole tax evasion saga is a replica of what happened with betting companies. Someone wants some competitors out of the market. It is also the same as the mercury sugar saga. It is a business rivalry. Do not be fooled,” said another economic analyst by the name Juma via a Twitter post.

“KRA is fooling us. The numbers quoted in tax evasion per individuals are mind-boggling. Again, if KRA had one single wise person, you don’t pursue a criminal case with such an amount. You will fail. The best option would have been a discussion between the parties,” said another influencer via a Twitter post.

“Is it so difficult for Kenya Revenue Authority to actually employ other methods to resolve tax issues and be fair by creating an environment that actually encourages compliance as compared to these guerilla tactics they are using on key job creators in this country?”

“Kenya Revenue Authority (KRA), do it without fear and we will support you. But the current aspect where you are increasingly looking like a pawn in a game of witch-hunt is not fair to those who create jobs and those who seek jobs,” those are the sentiments of another economic analyst, call him Soko Analyst.

“Whereas tax evasion is a serious crime and considering our economic situation and high rate of unemployment, I urge KRA to negotiate with Keroche (Tabitha Karanja) and Humphrey Kariuki instead of criminal enforcement. This fight must not leave our country in a worse situation than it is now,” said Senator Kipchumba Murkomen through his Twitter handle.

From the above sentiments, it is clear that Kenyans are no longer fools. It is crystal clear that it is becoming more difficult for one to fool Kenyans. Kenyans seem to be awoken, a rare characteristic to be associated by Kenyans given that we have been made to believe that we are the most forgetful nation in Africa, if not in the world.

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It started as a joke. We all sat and watched in silence. They seem to have taken the advantage of our silence to now go after every genuine business, criminalizing it, and last, closing them down under the camouflage of evading to pay tax. The gymnastics that the Kenya Revenue Authority is engaging in are not about tax evaders but rather being used by the usual powerful forces to fight and settle business rivalry scores.

At the beginning of July 2019, the Ministry of Interior, in conjunction with the Betting Control and Licensing Board (BCLB), failed to renew operational licenses for 27 betting firms in Kenya. They say if a hyena wants to eat her children, she first accuses them of smelling like goats.

Among the betting firms with are still fighting to make a comeback are the giant SportPesa and Betin, both of which controlled 87 percent of Kenya’s gaming industry. This got millions of Kenyans by surprise and until now, thousands of questions are still unanswered.

The government accused the firms of failing to remit their taxes to the Kenya Revenue Authority (KRA) as required by the law. The firms dismissed the claims and even produced documents that showed that they had been paying taxes. But the Big Brother wanted to hear none of it.

Ironically, three years before, the Kenya Revenue Authority had awarded SportPesa, three years in a row as the best taxpayer in the country. How SportPesa moved from being the best taxpayer to not paying taxes is a riddle in itself.

Currently, the decision by KRA and government to shut down some betting firms is costing it 1 billion shillings in revenues every month. If KRA and the government were wise enough to dialogue with the firms, perhaps they would have not lost the revenue they are now lamenting about.

In 2018 alone, both SportPesa and Betin paid more than 10 billion shillings in taxes to Kenya Revenue Authority with SportPesa contributing the lion’s share.

In the past few days, the nation has witnessed dramatic instances between the taxman and some notable businesses over unpaid taxes. The amounts quoted as tax arrears are mind-boggling and raises more questions than answers.

KRA is currently in a criminal dispute with two prominent business people in the country; Tabitha Karanja of Keroche Breweries and Humphrey Kariuki who runs a series of businesses both in Kenya and other countries.

KRA says Mr. Humphrey Kariuki owes them taxes to the tune of 41 billion shillings while Tabitha Karanja owes them taxes amounting to 14.5 billion shillings. The amounts quoted don’t even add up and how the amounts got to accumulate to such levels is a story for another day.

Questions have been raised as to how the businesses could accumulate such huge amounts in unpaid taxes without the authority noticing. The question is, where has KRA been all these years? Why is it not willing to listen to the aggrieved parties who have evidence to prove that they have been paying taxes?

Furthermore, KRA has a tax dispute tribunal that should have taken up the matter with the other parties but instead, the agency chose to pursue a criminal case. The intention with that is not to recover the money if at all the firms owes them, but to taint the images of the businesses and business owners.

What is happening is a business rivalry. It is a war with competitors wanting to eliminate each other through the use of state machinery and it needs a keen eye to see what is happening.

If KRA was keen on recovering the taxes, it would choose other methods such as dialogue and fairness but not a court of law because as things currently stand, KRA is going to lose big and the economy will feel it.



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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