President Uhuru Kenyatta has appealed to the Kenya Revenue Authority (KRA) and local investigation agencies to consider negotiation as a tool to resolve minor tax evasion cases.
Speaking on Tuesday at Safari Park in Nairobi during this year’s taxpayers awards, the president stated that KRA should not be weaponised to fight local entrepreneurs.
He called on the Director of Criminal Investigations (DCI) George Kinoti and the Director of Public Prosecution Noordin Haji not to criminalise every tax evasion cases. The two were in attendance.
“KRA should come up with other ways of dealing with minor cases on tax evasion to avoid delays, ” the President said.
“I direct Treasury, KRA, office of the AG to make recommendations that will strengthen the tax enforcement legal framework. KRA must have power to address tax evasion, expedite dispute resolution process.”
He called upon the judiciary to expeditiously determine tax disputes further directing the Tax Appeals Tribunal to table a report within the next three months on the progress of the cases.
In the thinly veiled message, the Head of State seemed to address recent cases that saw several renowned business people arrested over tax evasion cases amounting to billions of shillings.
In August, owners of Keroche Breweries Tabitha Karanja and her husband Joseph Karanja were charged with several counts of tax evasion.
The duo’s arrest was ordered by the DPP over tax fraud that was allegedly committed between January 2015 and June 2019.
While Ms Karanja spent the night at the DCI headquarters, her husband was released last night following a warning from Karen Hospital who noted that the director had just undergone a surgery and he needs medical attention.
The Karanjas are facing charges of tax evasion amounting to Ksh14.4 billion, which was subject to a consensus between Keroche and the taxman.
Ms Karanja termed the tax evasion claims malicious further accusing the government led by the DPP of frustrating local entrepreneurs.
“We are deeply shocked by both the allegations and the manner in which the matter has been handled. My shock is how a local investor can be humiliated, embarrassed and denied well-deserved respect,” said Mrs Karanja.
She revealed that the matter involved company’s Viena Ice ready to drink vodka introduced in the market in July 2007, which is a matter that is ongoing at the tax appeals tribunal.
” It’s a surprise Mr Noordin Haji claiming that Keroche Breweries is involved with a tax fraud amounting to a colossal Ksh14 billion; a figure that is baseless and without facts. The DPPs office must not be misled and needs get his facts right about this matter. The deployment of unnecessary force, communicating to a corporate entity through social media, and the deliberate publishing of false information to defame and destroy the reputation of a Kenyan company reeks of sabotage and not due process. Having a dispute with KRA does not constitute a criminal offence,” she said.
Founded in 2009 and wholly owned by the Karanja family, Keroche started by making spirits and wines before diversifying into beer. It was the first-ever Kenyan-owned company to brew beer which for a long time was the preserve of East African Breweries Limited (EABL).
In the same month, Thika billionaire Humphrey Kariuki was also charged over Ksh41 billion tax evasion offence by Africa Spirits and Wow Beverages.
The DPP was overly criticized over the arrests and humiliation of the entrepreneurs.
“Whereas tax evasion is serious crime&considering our economic situation&high rate of unemployment I urge KRA to negotiate repayment plan 4 evaded taxes with Keroche&HumphreyKariuki instead of criminal enforcement. This fight must not leave the country in a worse situation than it is, ” said Majority leader in the Senate Kipchumba Murkomen.
Whereas tax evasion is serious crime&considering our economic situation&high rate of unemployment I urge KRA to negotiate repayment plan 4 evaded taxes with Keroche&HumphreyKariuki instead of criminal enforcement.This fight must not leave the country in worse situation than it is
— KIPCHUMBA MURKOMEN, E.G.H (@kipmurkomen) August 21, 2019