Lobby group wants inquiry into conduct of KRA

Tuesday, September 24th, 2019 09:16 |

A youth lobby wants parliament to open an inquiry into the conduct of the Kenya Revenue Authority (KRA) which it accuses of being used to fight some investors on the pretext of tax evasion claims.

Vision 2030 Youth Entrepreneurship Association took a swipe at the taxman alleging it was being used like a pawn in the game of witch-hunt.

Chairman Edward Githaiga read mischief into the tax evasion allegations against Keroche Breweries called for an independent inquiry into the conduct of the Authority.

Githaiga said targeting successful local companies that have created employment could unsettle investors who might choose to move manufacturing jobs out of Kenya.

“Our manufacturing has declined since 2014 by three per cent. It’s almost cheaper to import mineral water, fish, beverages from China than to produce it here. This is backed by our own Bureau of statistics. Kenya’s import to export ratio is so high – 288 per cent in the three months to May 2019. The share of manufacturing to GDP has been falling by an average of 8 per cent every year since 2014,” he said

“We are a country of laws. The temptation by the new KRA management to create a KRA that frightens business people with the right to act on impulse on its allegations doesn’t add value to anyone. In business, it doesn’t make sense to go around arresting and humiliating your customers like what we saw in the case of Keroche Breweries. The exchequer needs taxes. Collapsed companies cannot add value to this mandate. And thousands of businesses are collapsing.”

Last month, the Director of Public Prosecutions Noordin Haji ordered the arrest and prosecution of Keroche Breweries owners Tabitha Karanja and her husband Joseph Karanja over alleged evasion of taxes amounting to Sh14.4 billion.

According to the DPP, an audit by KRA established that Keroche Breweries Limited evaded taxes by failing to pay Excise Duty and Value Added Tax (VAT) on its various products including Crescent Vodka, Viena Ice and Summit beers as well as duty stamps.

The alleged evasion of tax payment by Keroche Breweries Limited occurred between January 2015 and June 2019.

But Githaiga said the issue was mishandled, asserting that KRA should have pursued arbitration to resolve the matter.

Currently, he noted that around 150 local enterprises are being assessed through this method. Almost 80 per cent of Kenya’s top 100 companies have matters at the tribunal.

“This is the law and the practice.  However of late its obvious KRA is keen to replace arbitration with criminal prosecution. But with a cynical mentality. This strategy seems to only target local indigenous Kenyan companies.”

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