This archive report was first published on 12 September 2021.
Published on September 12, 2021, the Kenya Revenue Authority (KRA) has taken drastic measures to recover unpaid taxes from Kenyatta University, freezing all its bank accounts totaling Sh. 2 billion.
The move comes after the university failed to remit statutory deductions, sparking a deepening financial crisis. According to the Auditor General, Nancy Gathungu, the university is operating under financial difficulties and relying on costly borrowings, which may worsen the liquidity problem.
Ms. Gathungu's report revealed that the university had dipped into a Sh. 1.3 billion deficit in the year to June, forcing it to rely on short-term loans to finance its operations. The deficit reduced the university's accumulated surplus from Sh. 5.84 billion in 2019 to Sh. 4.5 billion.
Further, the current liabilities of Sh. 6.38 billion as at June 30, 2020, exceeded the current assets of Sh. 1.58 billion, resulting in a negative working capital of Sh. 4.8 billion. The university was unable to remit pensions and taxes amounting to Sh. 3.67 billion, audit fees of Sh. 8.1 million, and other deductions worth Sh. 342.9 million to the respective beneficiaries.
