This archive report was first published on 5 September 2019.
On September 5, 2019, Kenya Revenue Authority's new head, Mr James Githii Mburu, stormed into office with a mission to tackle the scourge of corruption and aggressive tax avoidance.
Mr Mburu has served notice on many rich individuals and corporations he has identified as owing the Exchequer Sh250 billion through tax evasion in the past two years.
He has shifted the focus of dealing with tax evasion and aggressive tax avoidance from civil court cases and dispute tribunals to recovering cash through prosecutions and administrative action.
One of the most dramatic cases of suspected tax evaders caught in Mr Mburu's dragnet is local magnate and entrepreneur Humphrey Kariuki, who has been hit with a tax bill of Sh41 billion and is currently facing criminal prosecution at a Nairobi Court.
Another notable case is that of Mrs Tabitha Karanja and her husband, Joseph Karanja, founders of Naivasha-based Keroche Breweries Ltd, who are facing criminal charges for evading taxes amounting to Sh14.4 billion.
Additionally, the taxman has slapped 27 sports betting firms with a demand of Sh61 billion, leading to the government suspending their operating licences for several weeks.
While the assault on tax evasion and aggressive tax avoidance is commendable, eyebrows are being raised about the tactics employed by the taxman, including arraigning suspected criminals in court while quietly offering them deals to negotiate assessed amounts downwards.
It is essential for the Kenya Revenue Authority to guard against introducing a police state and to focus on increasing corporate profitability and growth of the economy, rather than relying solely on taxation to raise revenues.
