This archive report was first published on 4 October 2019.
Kenya's public universities are facing a tax evasion scandal, with 11 institutions owing the Kenya Revenue Authority (KRA) a cumulative Ksh.9.7 billion in unpaid taxes.
According to KRA, the universities have failed to remit Pay As You Earn (PAYE) tax, with six vice chancellors facing possible prosecution for their role in the tax evasion.
The six universities at risk of prosecution are University of Nairobi, Kenyatta University, Technical University of Kenya, Jomo Kenyatta University of Agriculture and Technology, Moi University, Egerton University, and Garissa University College.
However, six of the universities have taken steps to settle their tax arrears, with Kenyatta University paying Ksh.120 million out of Ksh.2.1 billion in tax arrears, the University of Nairobi settling Ksh.221 million from Ksh.3.5 billion outstanding tax arrears, and JKUAT paying Ksh.295 million from the pending Ksh.890 million.
Other universities that have made payments include Multimedia University, which has paid Ksh.13.2 million, and Garissa University College, which has paid half of its debt at Ksh.10 million.
Technical University of Kenya, Egerton university, Maasai Mara University, Moi University, and Rongo University are the defaulting universities yet to make any payment.
Egerton University has cited financial strain as the reason for its inability to pay its tax arrears, with the University's Vice Chancellor Professor Rose Mwonya attributing the decline in the privately sponsored students programme and government reduction in capitation to public universities from 2016 as having greatly affected the institution's finances.
Companies trading with the universities are also on KRA's radar, with the taxman warning of prosecuting directors who have failed to remit withholding tax as per the law.
Five vice chancellors and senior officials of the universities are being probed on their tax compliance status.
With a target of more than Ksh.2 trillion to raise in the current financial year, the taxman is confident that its recent measures in the crackdown on tax evasion will yield fruit.
Published on October 4, 2019.
