KRA has Recovered Kshs 330 Million Tax from County Suppliers

The Kenya Revenue Authority (KRA) has recovered tax amounting to Sh330 million from various business entities trading with county governments, the taxman announced on Monday, September 14, 2020.

Following investigations by the KRA, the tax which includes Value Added Tax (VAT), Income Tax and withholding tax, was recovered within a period of three years up to September 2020 from different suppliers to the devolved units.

The taxman noted that despite there being an increase in county government expenditure, there was no corresponding increase in tax payments by the suppliers.

The evasion was mainly done through use of fictitious invoices to inflate costs, failure to file returns or filing nil returns even after earning taxable income.

Failure by the county governments to submit withheld taxes from suppliers and employees also facilitated the evasion.

David Yego, the Commissioner for Investigations and Enforcement said that some of the suppliers “have opted to seek redress at the Tax Appeals Tribunal (TAT) and while others have since engaged the Authority with the aim of settling the cases amicably as the provisions of the Tax and Customs Law.”

Mr. Yego added that “further investigations” on the matter were “ongoing” and that the taxman was “confident that the additional taxes shall be recovered from these suppliers.”

The taxman encouraged suppliers who are yet to be informed of the intention to carry out investigations, to use the amnesty under the Finance Act (2020) to declare and pay their due taxes.

Any supplier identified to investigations later on will not be allowed to “enjoy the advantages provided under the amnesty.”