KRA owed Sh1.6trn amid recovery doubts

Times Tower

Times Tower, Kenya Revenue Authority (KRA) head office in Nairobi. 

Photo credit: File | Nation Media Group

What you need to know:

  • The statement of arrears of loan and interest as of June 30, 2021, reflects non-tax revenue arrears of Sh74.01b.
  • Included in the balance is an amount of Sh39.16b which has been outstanding for more than two years.

The total tax arrears owed to the Kenya Revenue Authority (KRA) hit Sh1.6trillion by June 30 last year, an audit reveal, piling pressure for recoveries.

The amount includes Sh177.78 billion categorised as long-outstanding legacy debts dating back to 1992 and relate to penalties, interest, prior debt, estimated assessment debt, and other debt that are subject to key factors including data corrections, objections and appeals.

Further, the statement of arrears of loan and interest as of June 30, 2021, reflects non-tax revenue arrears of Sh74.01b comprising of loan redemption amounting to Sh38.07b and loan interest amounting to Sh35.93b.

Included in the balance is an amount of Sh39.16b which has been outstanding for more than two years.

Auditor-General Nancy Gathungu, however, criticised the National Treasury for continuing to capture the debt amounts in its revenue statement many years since they were incurred.

“Although management provided various reasons for the non-receipt of the revenues, it has not stated how it intends to ensure that the revenues are collected and accounted for or why the balances continue to be retained in the revenue statements some of which are unrecoverable,” she said in an audit of the receiver-of-revenue financial statements for the year ended June 30, 2021.

Ms Gathungu also took issue with Treasury for under-collection of revenue from the property. The audit showed that the State collected Sh50.49 billion in property revenue in the period, against an estimated revenue potential of Sh66.98 billion, resulting in an under-collection of Sh16.49 billion.

A separate report by Ms Gathungu said the State raises less than 60 percent of its rent income potential of Sh1.5 billion every year due to poor inventory keeping.

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