Kenya Revenue Authority Freezes Kenyatta University Accounts, Again

The Kenya Revenue Authority (KRA) has frozen all bank accounts belonging to Kenyatta University after a long-term fight of KSH 2 billion tax incitation.

In a news first reported by Daily Nation and seen by the Enterprise team on Sunday, September 12, the taxman reportedly froze the institution’s bank accounts over a Ksh 2 billion unpaid taxes.

In what revealed the escalation of the university’s financial crisis, the institution reportedly paid staff employees with checks that can not be processed.

The freezing of the accounts has happened at a time Kenyatta University students resume for yet another semester. The fate of the university is yet to be determined. This is because the case is almost as if the government is fighting the government.

However, the university management is said to have asked the KRA to lift the freeze as it seeks to settle part of the debt it owes the tax authorities.

Previously, the Auditor General, Nancy Gathungu noted that the situation had worsened at Kenyatta University as it relied on short-term loans to finance its operations. Ms. Gathungu also added that the university is in financial difficulty and has had to resort to expensive loans, which could exacerbate liquidity problems. “Technically, this university is unable to pay its debts and without urgent aggressive measures taken to improve its financial situation it may not be able to fulfill its mandate,” she said.

Gathungu also added that the university’s deficit of the year in analysis reduced its accumulated surplus of Ksh 3.4 billion. “In addition, the current liabilities of Ksh 6.38 billion on 30 June 2020 exceeded the current assets of Ksh 1.58 billion, resulting in a negative rolling capital of 4.8 billion Ksh,” said Gathungu in a report presented to Parliament in Mid August.

The institutions found in in-depth financial restrictions considerably blamed the small number of students, mediocre administration, and low state financing.

A similar incident occurred during the 2017-18 financial year where the University of Nairobi, Kenyatta University, and Multimedia University the universities reported a negative spinal capital of Ksh 5.5 billion. Kenyatta university reported the highest debt of Ksh 3.4 billion, followed by the University of Nairobi with Ksh 1.4 billion and multimedia university at Ksh 700 million in June 2018.

Vice-chancellors have so far proposed an increase in the rate of academics arguing that the current fees for Ksh 16,000 monthly fees can not cover training costs. The increased rates were also intended to connect revenue holes created by the abolition of the program of students sponsored in 2015.

Article by Julianna Desire