By David Wanjala
Foreign investors have, in the recent past, avoided Kenya like you would a plague. Those in the market already have, on the other hand been divesting, citing harsh economic trends, notably, high cost of electricity and other production factors. It is difficult to understand how Government could, gleefully, set out on hounding local investors out of business under the guise of fighting tax evasion.
We are not advocating for tax evasion. Far from it. Every business, indeed, every individual should carry out this civic duty with a religious devotion.
There is no smoke without fire. The recent dramatised arrests of Keroche Breweries Ltd proprietors speak to a bigger problem than meets the eye. However, if it was purely an issue of tax evasion, as the Government wants us to believe, then this regime is extremely oblivious of the problems it is facing.
Dust has not even settled on betting firm Sportpesa with regards to tax noncompliance issues despite having been celebrated by the same taxman as a top taxpayer in 2016, 2017 and 2018.
Kenya is facing harsh economic times. Job losses are being recorded almost every fortnight. Bamburi Cement, Airtel, Barklays Bank of Kenya and Britam Holdings are just but a few of the employers who have sent staff home on forced retirement. The media industry, once a thriving economic sector, has had the most restructuring exercises in the last five years that have eased out many employees. The bourse is on its knees. No new listings. The listed companies are deep into loss making. As at mid-August, the share prices of 17 NSE listed firms had fallen below Sh5 per unit, the bear run being attributed to either weak corporate governance or a tough economy and over indebtedness. Five stocks in that time traded below Sh1, a deep indictment on the health of the country’s listed companies and general economy.
Keroche Brewers Ltd have had running battles in the corridors of justice against KRA in the past, notably in 2015 and 2018, with the later running all the way to the Court of Appeal. Like we say afore, taxes should be paid. What we question and caution against, is government running roughshod, or even appearing to, against investors, be they local or foreign.
KRA itself cannot claim to be clean. That they claim the brewer owns them up to Sh14b in accumulated tax is an indictment to the taxman. Another business mogul, Humphrey Kariuki was dramatically hounded to court in the same month of August on a Sh41b tax evasion charge. KRA has never achieved its targets every financial year for the longest running period. What does this speak of KRA as far as integrity in carrying out its mandate goes?
While remitting of taxes is a civic duty, enforcing the same, especially where the alleged culprit is a wealth creator and employer of masses, should not be handled in the same league as in handling hardcore criminals. We need to see a scenario in future where KRA summons the alleged offender to a round table, away from the public glare, to discuss on modalities of how the same can be paid over a period of time, without destabilising the business and jeopardising jobs. Until this process fails, the DCI should have no business coming in. And even where they do come in, it should be with less drama, following due process as provided by the law.