Why state has weaponised KRA to rein in on Ruto critics

For many taxpayers, being issued a tax assessment by the Kenya Revenue Authority (KRA) is increasingly becoming a nightmare that could mean the death of enterprises and loss of livelihoods. 

The taxman appears to have transitioned from a tax agency to a beast that is seemingly bent on killing firms and driving individuals to the edge of sanity, especially those who are fierce critics of the government.

This aggression is despite an earlier promise by President William Ruto that the era of KRA shutting down businesses was gone and he would initiate reforms to make the agency friendly to taxpayers. 

In what has evidently become a weapon to fight back against criticism, the government has now trained its guns on political activist and gospel artist Reuben Kigame, who has been challenging its policies and vices.

Just days after Kigame filed a court petition seeking to prosecute the country's security chiefs, KRA has slapped him with a Sh20 million tax demand.

Terming the move a witch-hunt to silence him, Kigame questioned the motive behind the KRA demand , even as he expressed that it pointed to a retaliation plot to silence him.

"So I filed the case on Thursday, and believe you me, the next day I had an email from KRA indicating, among other things, that I owed the government over Sh20 million Kenya shillings," he told The Sunday Standard.

In the case that has since been approved by the court and certified as urgent, Kigame is seeking to initiate a private prosecution of top security officials, including Interior Cabinet Secretary Kipchumba Murkomen, Inspector General of Police Douglas Kanja, National Intelligence Service Director General Noordin Haji and Director of Criminal Investigations Mohamed Amin.

He is accusing the security bosses of sanctioning extra-judicial killings, abductions, enforced disappearances, torture and systemic suppression of peaceful protests that have left more than 100 dead and dozens of others nursing gunshot wounds.

He laughed off the KRA letter, saying: "I don't make that kind of money that can attract that kind of tax," expressing that "it is evil and vindictive for KRA to be treating me like a tax evader, like a tax criminal."

"I'm a very open book person, because on any good month I would be making maybe just under 200,000, and this is from music royalties, from small businesses that I do here and there," he said.

And what's more baffling is the fact that people with disabilities in the country, according to the laws of the land, are entitled to tax exemption.

However, out of what he termed goodwill, he has never chosen to apply for tax exemption, and he has been religiously filing his tax returns promptly without fail.

"There is what I call the voice of conscience that makes me look at a policeman earning 18,000 or 20,000, or a mama mboga,  and they pay tax. So if I make slightly more than they do, why shouldn't I pay tax? He paused.

Earlier, he wrote on his X account: "Note that as a PWD, I am entitled to tax exemption, but I voluntarily pay my taxes. I am a self-employed citizen owed millions from music royalties by this same government."

According to him, this is not an isolated case as he claimed that KRA has been pursuing him for a reasonable time now, citing that he had received similar treatment from the sometime in May 2024 when he returned from his visit to the United States.

"KRA is claiming that between 2020 and 2024, when they wanted my tax reviewed, that I sold a property worth Sh60 million," he said, dismissing the claims, "I never sold any property."

The president said he will be exploring diplomatic avenues to settle the issues the taxman has raised before he seeks legal redress should KRA fail to give him answers.

"If they cannot explain why they are charging me with things like selling a property I never sold, then I will pursue legal action," he declared.

While in many cases companies and individuals would pay or contest such a tax demand in a process that followed mechanisms stipulated in law, some are now being denied that option in a bid to silence them or force them to sing to the government's tune. 

Among the individuals who have in the recent past been on KRA’s receiving end is lawyer and activist Kebaso Morara, who last week claimed that the taxman is now being used to clamp down on his dissent against President William Ruto’s administration. Morara has in the past tried to expose corruption within the government, going around the country and documenting stalled projects despite the billions of shillings that have been sunk into the projects.

 He now claims that KRA is coming after him, freezing his accounts, deactivating his Personal Identification Number (PIN) and revoking his tax compliance certificate (TCC). 
“It (politics) comes at a very high personal cost. KRA came after me for taxes, some of the taxes I had paid, while in other instances, it demanded taxes that I was not due to pay yet,” he told media personality Andrew Kibe in an interview.

He alleged that KRA had backdated the duration during which he should have been paying some taxes, and on the basis of that, the Authority demanded that he had tax arrears of Sh27 million. 

“KKRA argued that I should have registered for VAT in 2021 and backdated my registration for VAT to 2021 and presumed my income back to that time. Against this, it said that I had not paid taxes on revenue of Sh187 million and I owed them Sh27 million,” said Morara. 

“It went ahead to issue a tax assessment, which meant that I should pay the taxes that KRA was demanding. It then went on to block my PIN and cancelled my TCC,” he said, adding that this has meant that he cannot undertake certain transactions such as buying a car or land. A freeze on his bank accounts has also meant that he cannot access money that hits the accounts.“KRA has ruined my life completely. I cannot open a new bank account and cannot use my current bank account because of the agency notices that KRA has put on the account. I was supposed to go to China for business, but I cannot go because getting a visa requires that I have a TCC. I have tried getting a certificate of good conduct, but I cannot.”

“I am operating like a criminal, yet I do legit business… I sell furniture, I am a carpenter.” 

The Standard Group has also had it rough with KRA, which in April this year nullified an earlier agreement to pay tax arrears over time and instead demanded that the media house pay what it owes in taxes upfront.

The company, which acknowledges past mistakes and has committed to paying all debts owed to KRA, staff and suppliers, was told to pay the about Sh2 billion it owes KRA immediately. While acknowledging that it has tax arrears, it has contested the amount, noting that it had made some payments that do not reflect in KRA’s new iTax system. Some of the money is also in penalties and interest, but KRA frustrated its bid to apply for the amnesty that ended June 30 this year. 

The demand for an upfront payment for all taxes owed to the taxman had followed a series of meetings, in which KRA had told Standard Group that its earlier payment plan had been nullified following changes at the large taxpayers' office. In the initial meetings, KRA’s debt enforcement team had told the company to choose a payment plan covering between 12 and 36 months. 

“We told them that based on our current situation, we could fit in any of these plans. They advised us to write a letter, which we did, telling them that based on our assessment, we would be able to pay within 72 months, a period which aligned with our financial situation,” said Chaacha Mwita, acting chief executive officer of Standard Group.

KRA, however, rejected its proposal, and the debt enforcement officials told Standard Group officials that they now needed to pay the entire amount upfront. 

“They told us we have to pay the entire amount immediately,” said Mwita.
The KRA team declined further talks and referred the company’s officials to Commissioner for Large and Medium Taxpayers, Risper Simiyu.
After several attempts, the Standard team eventually secured a meeting with the Commissioner, but after what seemed to be an attempt to avoid the team. 

During the talks, the Commissioner agreed to extend the repayment period by just three months. This would mean that the company had to pay more than Sh600 million per month, an amount that the company said would have been impossible to raise.

While three months was barely enough time, Simiyu added more stringent conditions for the company – it would need to pay the first instalment for KRA to lift a freeze it had placed on Standard Group’s bank accounts.
The demand to pay the entire amount had been followed by KRA’s freeze on the company’s bank accounts in May. This has since meant that the company is at a standstill as, without access to its accounts, it has struggled to pay employees, suppliers and even state agencies, including current taxes and arrears to KRA, licensing obligations to the Communications Authority of Kenya and the Media Council of Kenya.

“It appears that their interest is for the Standard Group to close down,” said Mwita, acknowledging that the company has in the past made mistakes, including the deduction of taxes from employees and not remitting them to KRA, but added that it has owned up to them and has been making efforts to address them. The move by KRA has been a significant setback.

“We see an orchestrated move to run us out of business, forcing us to shut down. If your accounts are frozen, how do you pay them (KRA) their taxes, how do you pay for licences, how do you pay salaries?”

Numerous other individuals and companies have suffered a similar fate as KRA goes after them and pushes them to the verge of collapse. It is not a new phenomenon, as previous administrations have allegedly used KRA to wage political wars.

Among the much-publicised fights that KRA has waged on business was with alcohol maker Keroche, which has had long-standing tax arrears. The firm is claimed to have failed to remit various taxes, including excise duty, VAT and income tax, with the dispute going as far back as 2002, and part of it has stemmed from disagreement over how to classify some of its products, including fortified wines and ready-to-drink vodkas. The reclassification by KRA resulted in higher tax assessments.

Despite objecting to the taxes, Keroche would get into payment plans for the outstanding tax arrears with KRA but failed to honour them, leading to KRA's aggressive enforcement that led to shutdowns and KRA putting agency notices on the firm’s bank accounts.

The enforcement actions hit the firm, which could not conduct business as usual. The firm has recently started to rebuild and said it has new management in place. Tabitha Karanja, Keroche’s owner, has in the past claimed that the KRA's actions were politically motivated.

Humphrey Kariuki’s Africa Spirit Limited, manufacturer of Legend Whiskey, was shut down in 2019 by KRA over claims of tax evasion.

At the time, KRA said the company had evaded payment of taxes to the tune of Sh41 billion. Africa Spirits, KRA had claimed, was packaging illicit alcohol and using fake KRA stamps. There were reports that the closure was also politically motivated.

KRA would hand the firm back to Kariuki in December 2022, shortly after President Ruto took over power in September 2022, with speculation that this was on account of his association with the regime of the day. Kariuki had also been appointed to the National Investment Council, marking a turnaround from being an enemy to a friend of the government.

The liquor company was placed in administration in June this year, with the administrator now trying to rescue the company. The aggressiveness seen in KRA to ensure tax compliance among businesses, which for some is outright harassment and borders on intent to kill companies, is a contrast to the reforms that the President promised when he took over. 

He has repeatedly said the tax authority would be reoriented from being a menacing entity to a friendly agency that guides businesses into tax compliance. 
"Effective revenue collection doesn't need to be unpleasant and demeaning to members of the public; it is possible to be courteous, kind, and gentle to taxpayers and at the same time become even more effective and efficient in tax collection," said Ruto in 2023 during the annual Taxpayers’ Day celebrations organised by KRA.

But the aggressiveness has not stopped, and if anything, the National Treasury has sought to give KRA more powers to pursue Kenyans in the government's bid to grow tax revenues. This year, the Ministry had proposed clauses in the Finance Bill 2025 that would give KRA powers to access trade secrets and personal data, as well as an attempt to reclassify zero-rated goods as VAT-exempt.

The proposal was, however, rejected by the National Assembly’s Committee onFinancee and Planning, which noted that the proposals granting KRA sweeping access to personal data for tax compliance purposes, particularly where trade secrets or personal customer data are involved, did not meet the threshold of Article 31 of the Constitution,, which guaranteethe s right to privacy.

It is not the first time that the government has tried to give KRA access to private information. It made a similar attempt in last year’s Finance Bill 2024, which was rejected following the anti-Finance Bill protests by Gen Z. In last year’s Bill, the Treasury had proposed to review the Data Protection Act to exempt KRA from the requirements of the Act when auditing taxpayers.

At the time, stakeholders raised concerns that this was against the Data Protection Act and the Bill was trying to take away the constitutional rights to privacy through the back door. The Bill was eventually dropped when President Ruto declined to assent to it and instead withdrew the Bill.