The government has bowed to pressure from Kikuyu tycoons to slow down Kenya Revenue Authority raids on tax cheats.
The pressure from the tycoons saw Uhuru Kenyatta direct KRA to consider the deployment of alternative dispute resolution mechanisms to assist in the timely resolution of disputes outside of the lengthy and expensive judicial processes.
“There is no need to frustrate an individual who has made minor mistakes. Someone could have made mistakes but sit down and agree. Don’t weaponise KRA,” the president said at a Nairobi hotel when he presided over the 16th annual taxpayers’ luncheon organised by the tax authority.
Uhuru raised concern about KRA’s pursuit of suspected tax defaulters, stating that some of its previous crackdowns have been overzealous and may have hurt the country’s economy.
He urged the taxman to find a method that would work in favour of both the traders and the commission.
Uhuru directed KRA, the National Treasury and the Attorney General to kickstart a review of tax laws for efficient collection and administration of revenues.
Three months back, the president made an impromptu visit to the Inland Container Depot in Embakasi where seized containers were being stored.
The visit was prompted by complaints by traders whose goods have been confiscated.
The KRA was been blamed for delays in clearing cargo at the port of Mombasa and the inland depot in Nairobi.
There were claims the situation had been compounded by KRA employees who were said to be on a go-slow to protest what they perceive as harassment of their colleagues.
The delays were attributed to staff changes at KRA following interdiction of 75 officials who were linked to illegal cargo clearance and irregular issuance of tax compliance certificates.
Among Kikuyu tycoons facing tax evasion charges is billionaire Humphrey Kariuki who stand accused of evading paying Sh41 billion.
The tycoon’s troubles started early this year after detectives raided his Africa Limited Spirits firm in Thika, where other than millions of fake excise stamps, they recovered tonnes of undeclared ethanol.
He was away when Peter Njenga, Robert Thinji and Kepha Githu Gakure denied tax evasion charges when they appeared before Nairobi chief magistrate Francis Andayi on August 9.
Njenga, Thinji and Gakure were released on Sh11 million cash bail each with an alternative of a bond of Sh20 million.
Also, owners of Keroche Breweries, Tabitha Karanja and her husband Joseph Karanja were arraigned in court to answer to up to 10 charges related to tax evasion.
Before being paraded in court, Mrs Karanja had spent the night at Muthaiga Police Station but her husband was released on the intervention of his doctors.
Director of Public Prosecutions Noordin Haji ordered their arrest and arraignment to answer to charges of tax fraud committed between January 2015 and June 2019.
But Mrs Karanja accused the taxman of selective and unfair targeting, arguing that she has always followed the law and was shocked to be accused of tax evasion when the matters were still under a tax tribunal.
Founded in 2009 and wholly owned by the Karanja family, Keroche started by making spirits and wines before diversifying into beer.
Another company on KRA radar and whose some of the directors are from the Kikuyu community is SportPesa.
Last week, SportPesa reportedly revoked termination letters given to employees at the beginning of October.
SportPesa CEO Ronald Karauri said the sports betting firm withdrew the letters so it can issue proper redundancy notices.
On October 2, the firm sent home 362 employees after announcing it had halted operations in Kenya due to tough regulations, including higher taxation and tough advertising guidelines.
Before it closed, SportPesa had been out of business for nearly three months after the government suspended its pay bill numbers.
The company had expressed disappointment at the government’s move to impose a 20pc excise tax on all betting stakes on top of the 20pc on customer winnings.
The directors of Sportpesa are Gene Grand (American) -21pc, Guerassim Nikolov (Bulgarian) – 21pc, Asenath Wacera Maina (Kenyan) – 21pc, Paul Wanderi Ndung’u (Kenyan) -17pc, Ronald Kamwiko Karauri (Kenyan) – 6pc, Cellini Holdings – 5pc, Valentina Nikolaeva (Bulgarian) – 3pc, Robert Kenn Wanyoike Macharia (Kenyan) – 3pc, Ivan Kalpakchiev (Bulgarian) – 2pc and Francis Waweru Kiarie (Kenyan) – 1pc.
The SportPesa directors reportedly sent emissaries to the president to intervene in their feud with KRA.
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