The National Treasury netted Sh2.9 billion in revenue from forfeited assets, fines, and penalties in the year ended June—27 per cent up in collections in the wake of a widened crackdown on corruption and law enforcement.
The amount exceeds Treasury’s Sh2.2 billion target for the period and is Sh610 million higher than its 2020/21 earnings.
This comes amid a renewed fight by the government against fraud and money laundering, which has seen high-profile individuals surrender millions of shillings to the State.
Last month, Deputy President-elect Rigathi Gachagua lost Sh202 million to the government after High Court ruled that the money the politician held in four accounts at Rafiki Microfinance were proceeds of corruption.
The Court ruled that while Mr Gachagua admitted to receiving the funds from government agencies, he could not prove that he provided any goods or services to the government.
In April, betting firm MozzartBet also lost Sh300 million to the government after High Court ruled that the money was proceeds of crime.
Proceeds of crime
Justice Esther Maina ruled that the money held in three bank accounts was part of a money-laundering scheme and should be forfeited to the state.
In July 2021, a Mandera county official lost Sh62 million to the state after High Court ruled that the cash held in two Equity Bank accounts was proceeds of crime and theft at the devolved unit.
Justice Mumbi Ngugi found that Abdi Mohamed Ali, the director of Livestock since February 2013, failed to explain how he made the money deposited between June 2014 and January 2020 when he received Sh9.9 million as salary from the county government.
The deposits were made days apart in tranches ranging from Sh50,000 to Sh5 million in the joint accounts with his wife Saadia Sheikh Osman. He made withdrawals of Sh10.4 million during that period.
The Sh2.9 billion collections from forfeitures, fines, and penalties come amid a long-running battle between the Treasury and the Judiciary over the custody of the proceeds from fines, penalties, and forfeitures.
The Judiciary Fund
Members of Parliament had instructed the Treasury to allow the Judiciary to retain the monies to assist it in putting the Judiciary Fund into operation.
In the 2022 Budget Policy Statement, Treasury Cabinet Secretary Ukur Yatani overruled the MPs, arguing, the fees are a critical source of government income and that the Judiciary should only retain the fees charged on services they render.
“The bulk of the fees collected by the Judiciary are fines and forfeitures, which are fees not intended to defray any court or administration expenses but are legal impositions and penalties required and demanded by law. It is important to remit these fines and forfeitures to the exchequer to avoid any conflict of interest,” said Mr Yatani.
The Judiciary Fund became functional last week after the Treasury wired Sh9 billion into its bank account for both recurrent and development spending for the 2022/23 financial year.