Kenya’s Ruto says tax agency is corrupt

Kenyan President William Ruto has accused the staff of the Kenya Revenue Authority (KRA), the country’s tax collection agency, of engaging in corruption and colluding with tax evaders, thereby reducing government revenue. During a live-streamed event with KRA’s management and board members, President Ruto expressed his concerns about the pervasiveness of corruption, bribery, and collusion within the agency.

President Ruto, who came into office with a promise to uplift the poor, has faced challenges since his election in August. The economy has been strained due to growing government debt repayments, revenue collection shortfalls, and high prices of basic commodities, leading to protests. Kenya’s external debt stood at $34 billion as of January, a significant burden inherited from his predecessor, Uhuru Kenyatta. The escalating interest payments on domestic debt have added pressure to the government’s cash flow.

The situation has resulted in delays in salary payments for public service employees and threats by local authorities to shut down their operations in protest against delayed cash disbursements from the national government. President Ruto criticised KRA staff for hindering government efforts to boost tax collections by assisting corrupt taxpayers in evading payments.

The Kenya Revenue Authority has faced previous scrutiny, with 75 of its staff arrested in May 2019 on suspicion of abetting tax evasion and bribery. President Ruto further accused KRA staff of resisting digitisation efforts in revenue collection, which would seal loopholes. The agency has yet to respond to these allegations.

Kenya’s tax collection figures for the latest period have not been released, but reports indicate that KRA collected 1.57 trillion shillings ($11.5 billion) in the ten months leading up to April. To meet the government’s target of 2.1 trillion shillings by the end of June, KRA has two months remaining. President Ruto highlighted that Kenya’s tax collection as a proportion of the annual economic output has been underperforming compared to countries like South Africa.

To boost revenue, the administration has proposed tax increases that will be presented to parliament next month. However, these proposals have sparked anger among citizens and the opposition. The government aims to address the revenue shortfall and tackle corruption within the tax system to improve the country’s economic situation.

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