The Kenya Revenue Authority (KRA) has recovered Kshs. 330 Million tax from various suppliers trading with county governments.

The taxes comprising of Value Added Tax (VAT), Income Tax and Withholding Tax, was recovered over a period of three years from various suppliers following investigations by the KRA.

“Kenya Revenue Authority has in the past three years received intelligence reports of tax evasion by various business entities trading with county governments. Following investigations, some suppliers agreed to pay taxes due while others have been charged in court. Others have opted to seek redress at the Tax Appeals Tribunal (TAT) and while some have since engaged the Authority with the aim of settling the cases amicably as per the provisions of the Tax & Customs Laws. We are confident that additional taxes shall be recovered from these suppliers”, said the Commissioner for Investigations & Enforcement Mr. David Yego.

The Authority has further established that tax evasion by county suppliers is mainly done through use of fictitious invoices to inflate costs and failure by County Governments to submit taxes withheld from the suppliers &employees among other non-compliance issues like failure to file returns and filing of nil returns even after earning taxable income. Further investigations are ongoing in this regard.

“Over the investigative period KRA carried out risk analysis and established that despite the increase in expenditure by the County Governments on supplies of goods and services, there was no corresponding increase in tax payments by the suppliers in terms of Income Tax, Valued Added Tax and withholding taxes”, said Mr. Yego. 

The Authority wishes to encourage the suppliers who are yet to be notified of intention to carry out tax investigations, to take advantage of the amnesty as provided under the Finance Act (2020) to declare and pay their due taxes. Once a supplier is identified for investigation, they will not be allowed to enjoy the advantages provided under the amnesty.

It is an offence under the Tax Procedures Act to deduct and fail to pay due taxes. The Authority will therefore promptly institute criminal investigations for prosecution where it is established that the county officials have failed in their statutory obligations tax under tax laws.

Commissioner for Investigations & Enforcement