MPs Give KRA a Week to Provide List of Tax Waiver Beneficiaries

KRA has been given seven days to provide the Parliamentary Committee on Finance and National Planning with a list of all the people and businesses who benefited from tax waivers, exemptions, and abandonments.

This covers the last two years.

The committee objected to the authority’s handling of the situation, in which it was claimed that the nation lost more than Sh200 billion.

This was revealed over the weekend at a contentious meeting between committee members and KRA senior officers at the Lake Naivasha Simba Resort.

The National Treasury, which was supposed to facilitate revenue collection, was revealed during the meeting to have granted waivers, exemptions, and abandonments over opposition from the revenue body.

The committee’s chair, Kimani Kuria, claims that “illegal” waivers and exclusions are to blame for the nation’s repeated failure to reach its budgetary estimates.

After speaking to the media after the meeting, he indicated that most waivers, exclusions, and abandonments occurred between 2021 and 2022.

Influential individuals, ministries, a Chinese firm, and organizations headed by prominent people in the nation all profited.

“We are not satisfied by the information given by KRA as we want to know who these demi-gods are, as many youths have been denied tax compliance certificates but rich individuals are been exempted,” Kuria said.

“We have ordered KRA to come back in seven days with all the names of individuals and organisations that benefited from these illegal waivers and exemptions,” he added.

The outspoken lawmaker accused Treasury of abandoning decisions on PAYE, excise duty, and VAT while disobeying instructions from KRA.

“Some of these companies had collected taxes on behalf of the State and all that was required was to remit it but people in the Treasury and in abuse of power gave them abandonments,” he said.

The committee objected to a contract signed by KRA and the Swiss business SICPA, which is responsible for the printing of excise stamps, during the meeting.

Kuria said that when the foreign contractor charged Sh1.80 for a stamp but KRA only charged 50 cents, the nation lost Sh4.1 billion.

“The contract was entered in Euros which is illegal and the contractor has now agreed to lower the charges to Sh1 per stamp, which raises more questions than answers,” he said.

Kesses Mp Julius Ruto who is a member of the committee said that the country lost over Sh200 billion through the tax waivers.

Ruto mentioned that a multi-billion dollar project involving a Chinese corporation included the Ministry of ICT as one of the exemption recipients.

“We have come to learn that over 90 percent of these tax waivers and exemptions were given during the election year,” he said.

The Mp pointed out that the government has struggled to reach its budgetary goals as a result of the illegal exclusions and waivers, which have resulted in increased taxes for mwananchi.

He stated that in other instances, one entity receiving an Sh14 billion waiver caused conflict between KRA and the Treasury.

“In some of these cases, Treasury ignored advice from KRA in collecting VAT, PAYE, and Excise duties from some companies and went ahead to give abandonments,” he said.

Ruto raised the duty stamp tender once more, saying that they would look into it further to determine who the beneficiaries were and why a foreign company was chosen.

In October of last year, President William Ruto expressed concerns, claiming that a scam involving dishonest businesses and KRA insiders causes Kenya to lose money in the manufacturing sector because fraudulent stamps are used on goods.

The President claimed that those responsible for the creation and usage of false revenue stamps end up with lost funds.

“Part of our revenue gets lost because of the stamps that you use on your manufactured goods. Part of why our contribution of manufacturing to GDP is low is because many people pocket money meant for taxes,” Ruto told a forum in Nairobi.

The President argues that Kenya is selling 2.9 billion stamps for excisable goods, while Tanzania, a neighboring country, is selling 7.2 billion and Uganda, 9 billion.