KRA targets 600 individuals in war against tax evasion

KRA Commissioner General Githii Mburu

NAIROBI, KENYA: The Kenya Revenue Authority has disclosed that it will prosecute 600 individuals this year for tax evasion related cases.

The Authority revealed that it prosecuted 222 individuals last year but the figure will go up in 2019 in a step that is also targeting to help the taxman boost its revenue collection.

“Last year we took to court 222 individuals, this year we have shifted our focus completely, we want to prosecute 600 individuals.

“We have shifted focus in 2019 and have watertight cases targeting up to 600 individuals, these are cases which are properly investigated and we are sure that we will get over 94 per cent success rate,” KRA said.

“So we won’t take to court if we know that the case is not backed by the law.”

On prosecution, KRA recovered Sh12.6 billion from 210 tax evasion cases won while 222 suspects were persecuted at the law courts leading to the recovery of taxes amounting to Sh12.9 billion.

Last year, KRA participated in strategic operations as part of the multi-agency team against illicit trade and contrabands. Through the initiative, interceptions were made including those of high-end motor vehicles imported from the United Kingdom (UK). Approximately a total revenue of Sh9 billion was recovered from the operations.

KRA has also prioritized partnerships nationally, regionally and globally as a key player in the fight against tax crimes. Last year, KRA collaborated with Organisation for Economic Co-operation and Development, US Treasury, Australia Taxation Office, Sweden Tax Agency, Inland Revenue Authority of Singapore, Kenya Private Sector Association among other institutions.

The measures are part of KRA plans to boost its revenue collection which it reported at Sh1.58 trillion against the National Treasury target of Sh1.8 trillion in the financial year 2018/19.

On Wednesday, KRA cited subdued private sector employment as the reason for underperformance in pay-as-you-earn (PAYE) which grew by 7.9 per cent in the financial year 2018/19.

“Employees Registered for PAYE grew by 4.5 per cent in Financial Year 2018/19," said KRA in a statement.

The taxman noted that PAYE growth was driven by the public sector, which registered a cumulative growth of 8.9 per cent driven by salary increases to teachers. "Tax policy, driven by the impact of the widening of tax bands, reduced the revenue base by Sh6, 125 million cumulatively."

KRA’s new war on tax evasion comes days after the Director of Public Prosecution Noordin Haji preferred arrest of tycoon Humphrey Kariuki (Director WOW beverages) and others over Sh41 billion tax arrears.

Haji said the revelation followed KRA audit which revealed that Africa Spirits/WOW beverages had evaded payment of tax in the amount of over Sh41 billion between the period of 2014 and 2019.

“In addition, the audit revealed that there was evidence of tampering with the production system at the Africa Spirits factory that led to the submission of false declaration to KRA,” he adds.

On Monday a statement from Janus Continental Group said Kariuki had recently stepped down as chair of the board of the group and its associate businesses.

“Humphrey Kariuki explained that this will allow him to focus his efforts on challenging the claims in the courts,” JCG said in a statement regarding the resignation.