Anne Kananu seeks to stop arrest over Sh3.4 billion tax dispute

Nairobi Deputy Governor Anne Kananu has moved to court seeking to stop her arrest over the county’s failure to remit taxes amounting to Sh3.4 billion to Kenya Revenue Authority.

Kananu also wants to stop the Director of Criminal Investigations from summoning her over the tax evasion queries arguing that the dispute is still being mediated between the County Government and KRA to find a solution.

Through lawyer Thomas Letangule, Kananu claims the impending arrest amounts to witch-hunt and unjustifiable given that the alleged tax the county government owes KRA was accrued before she assumed office.

“The Deputy Governor who is currently acting as governor is apprehensive of a looming arrest by the DCI which is a threat to her liberty. The intended arrest is an abuse of the criminal justice system since it is only intended to embarrass her and the county officials,” said Letangule.

Kananu’s contention is that the tax demanded by KRA accrued from 2011 and that she cannot be individually held responsible for failures of the Nairobi County Government to remit taxes to KRA.

She jointly filed the suit alongside the county’s Chief Executive Officer for Finance Allan Esabwa, deputy director in charge of debt management David Kimburi Wambugu and the county’s head of treasury Martha Karungari.

Kananu and the Nairobi County officials were summoned by DCI on October 27 to record statements over the investigations by KRA relating to the Sh3.4 billion tax evasion.

They however failed to honour the summons, claiming that there were plans to arrest and prosecute them once they present themselves at the DCI offices.

According to the officials, the DCI had already prepared to charge them with offences relating to failure to remit income taxes, and withholding tax on behalf of the county government.

“The intention to arrest and prosecute the officials over matters which are still under mediation was rash, unfair, malicious and meant to humiliate the acting governor given that the dispute involve the periods she was not in office,” said Letangule.

He argued it was not possible for the officials to honour the DCI summons because of the short notice given and the fact that they had already made elaborate plans to settle the dues.

Letangule accused KRA of using the criminal justice system to forcefully compel the county government into remitting tax which is still disputed.

In any event, the lawyer argued that the county government made a commitment to make a monthly deposit of Sh250 million from July and has so far paid Sh1.3 billion which makes the hurried investigation and potential arrest unnecessary.

“The county government has always acted in good faith and have made efforts to settle the arrears. It will be unfair to arrest people who are only acting because of the office they hold,” he said.

Letangule said KRA has been the entity that collects revenue on behalf of the County Government since the establishment of Nairobi Metropolitan Services and knows how much money the county generates and therefore should not demand to paid the entire tax at once.