The Kenya Revenue Authority is in a financial mess, the Auditor General Nancy Gathungu has revealed. According to a report from the Auditor General, KRA which is tasked with revenue collection has liabilities that outweigh its assets by close to Sh10 billion.
The report shows that the KRA’s liabilities stand at Sh13.4 billion against current assets of Sh3.9 billion. Within the financial year ended June 2024, KRA managed to increase its liabilities by Sh2.5 billion. In contrast, its assets in the same year only increased by Sh613 million.
“This is a reflection of [KRA’s] continued accumulation of debts… [It is] an indication that the authority is in a net liability position and may not be able to settle liabilities when they fall due,” Ms Gathungu said in the report.
KRA to block bank accounts, PINs of jua kali workers over housing tax
The report noted that KRA’s liabilities include Sh3.6 billion that is from an imbalanced pricing model for excise stamps fitted on non-alcoholic beverages. These stamps, the report says, were set below the actual cost defined in the Excisable Goods Management System (EGMS).
“This has resulted in [KRA] absorbing the costs associated with this pricing structure leading to accumulation of debts,” the report said.
Incidentally, the taxman lost 9,686,358 excise stamps, which the Auditor General has flagged as potentially related to theft. “No evidence was provided on the type of the stamps lost, when the stamps were lost and investigations on the circumstances leading to their loss,” the report stated. This loss has now raised concerns that the market might be saturated with fake alcoholic beverages, cigarettes, soft drinks and cosmetics.
In addition, the Auditor General noted that KRA had withheld information pertaining to expenses and remuneration paid out to the board members. “There is no disclosure of the remuneration to board members individually, the accounting officer and senior management as required by the Mwongozo Code of Governance for State Corporations,” the report stated.
