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Nairobi Governor Anne Kananu.

County News

Ag Nairobi Governor Kananu appears before KRA team over Sh3.4bn tax arrears

NAIROBI, Kenya June 15 – Acting Nairobi Governor Anne Kananu has appeared before the Kenya Revenue Authority’s (KRA) Investigation and Enforcement team in response to summons over Sh3.49 billion tax arrears.

Sources said the arrears have already accumulated penalties and interest amounting to a further Sh3.1 billion.

The tax arrears, which relate to the period between 2011 and June 2020 arose from taxes deducted from County employees and suppliers to the County government but have not been remitted to the Government through the KRA as required by Law.

These include Pay As You Earn (PAYE), Withholding VAT, Withholding Tax among others. KRA and officials from the County government had previously held several discussions on this matter but without significant progress; prompting the involvement of the acting Governor.

Sources said the acting Governor was accompanied by the County Secretary Jairus Musumba, Finance CEC Allan Igambi and Finance Chief Officer Halkano Waqo, among other top officials in her administration.

Reliable sources indicate that the Governor appeared at KRA on Monday afternoon and was briefed on the build-up of the unpaid taxes after a cat and mouse game through the weekend.  The County officials were also informed of the consequential negative implications and reputation to their service providers and employees when they fail to remit the deducted taxes. The engagements are said to have been fruitful.

“The Deputy Governor was summoned over the tax arrears and she appeared yesterday,” a source told Capital FM Tuesday but there was no immediate response from the Deputy Governor’s office or KRA.

It is worth noting that failure by County governments to remit deducted taxes, renders their suppliers non-compliant in their individual tax obligations. This in turn, hampers them from accessing tax compliance certificates (TCC) hence, forcing them to seek alternative resources in order to settle their tax obligations.

Similarly, when PAYE amounts deducted from employees are not remitted to KRA, these employees fail to get their TCCs which are vital in accessing their pensions, alternative employment or consultancy assignments. Previously, the Authority has grappled with numerous complaints from County employees and suppliers against their employers and procuring entities over similar malpractices.

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Through several communications and engagements with the public, KRA has from time to time encouraged taxpayers to co-operate with the Authority in meeting their tax obligations avoid punitive enforcement measures.

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