The Kenya Revenue Authority (KRA) has froze the accounts of 11 universities over tax remittance row that has denied the taxman at least Ksh10 billion.
Among those affected are giant institutions including Kenyatta, Technical, Multi-Media, Garissa, Pwani, Jomo Kenyatta, Egerton, Maasai Mara, Moi, Rongo and the University of Nairobi.
Most of the universities have not remitted Pay as You Earn (PAYE) deductions for years, leaving them with a burden of tax arrears. Such remittances should be paid to the KRA on ninth of evry month, lest they attract a 25 per cent penalty of the amount of the tax involved.
“The initial amount owed to the Kenya Revenue Authority was Ksh10.4 billion. So far, six of the 11 universities have paid Ksh730 million to the taxman between July and September 2019,” Commissioner for Domestic Taxes Elizabeth Meyo said.
“The institutions of higher learning who have not reached out to KRA in regard to their tax matters are urged to do so with immediate effect or face the law,” she said.
This comes at a time the taxman is struggling to meet its tax collection targets, now exploiting every available avenue to enforce tax collection.
Tax evasion is estimated to have cost the economy at least Ksh250 billion in 2018/2019 financial year, when KRA missed the target by Ksh61 billion.
The taxman is now targeting businesses and individuals who are suspected to be evading taxes, with the crackdown already on.
10 governors are said to be the next target, at a time when several businesses and individuals have been pinned down.