Kenyan president accuses tax agency of graft as economy struggles
Increasing debt repayments, disappointing revenues and high prices of basic goods have put pressure on the Kenyan economy under Ruto’s rule.
Kenyan President William Ruto has accused the tax collection agency’s staff of reducing government revenues by engaging in corruption and colluding with tax evaders.
“Collusion, deliberate bribery and widespread corruption continue to permeate KRA’s operations [the Kenya Revenue Authority]the president told KRA management and board members on Friday at an event streamed live on his social media pages.
Ruto was elected in August after promising to help the poor, but has struggled in his position as rising government debt repayments, disappointing revenue collections and high commodity prices have strained the economy and sparked protests.
As of January, Kenya’s external debt stood at $34 billion, part of a massive debt profile that Ruto inherited from his predecessor Uhuru Kenyatta.
Annual interest payments on domestic debt alone have risen from 180 billion shillings ($1.34 billion) nearly a decade ago, when the debt crisis began, to 680 billion shillings ($5.09 billion) this year, driving the cash flow of pressuring the government, said presidential adviser David Ndii. in April.
Government officials have complained of delays in salary payments in recent months, while local authorities have threatened to halt operations in protest of delayed cash disbursements by the national government.
Ruto on Friday charged that the government’s efforts to boost tax collection have been hampered by unscrupulous KRA employees who spent their time helping corrupt taxpayers evade payment.
The agency has not yet responded to the allegation.
The Kenyan authorities have fought corruption and the tax collection agency has come under scrutiny. In May 2019, 75 KRA employees were arrested on suspicion of complicity in tax evasion and bribery.
On Friday, Ruto also accused agency staff of resisting and sabotaging past efforts to digitize tax collections to prevent the government from closing loopholes.
“I have to be candid because I have work to do,” the president said.
KRA has not released its latest tax collection figures, but local media said it collected 1.57 trillion shillings ($11.5 billion) in the 10 months to the end of April, meaning it has just two months to meet the government’s target of 2.1 trillion shillings by the end of June.
In terms of tax collected as a percentage of annual economic output, Kenya is underperforming other countries such as South Africa, the president said.
To boost revenues, his government has proposed a series of tax increases in proposals due to be presented to parliament next month, angering citizens and the opposition.