DP Gachagua: No more business closures over tax disputes

Deputy President Rigathi Gachagua says President William Ruto’s administration will not close down businesses over tax disputes with the Kenya Revenue Authority (KRA).

Using the example of businessman Humphrey Kariuki’s distillery, which was closed down by the agency, Gachagua urged investors to engage in discussion, which he believes is essential for growth.

He regarded it as a poor decision that will never be repeated.

“That factory was paying about KES 50 million in terms of tax every month. They sent DCI there, policemen, shut it down, arrested Humphrey Kariuki, a very enterprising Kenyan, a very honorable man, a man who was toiled through his life and built,” he stated.

“African Distillers factory owned by Humphrey Kariuki was closed & it was paying KES 50 million every month in terms of tax and for three years we have lost KES 1.8 billion, money that we need in this country. That was a foolish decision and that will never happen in this administration.”

While encouraging Kenyans to diligently pay their taxes, he encouraged the tax agency to collect dues owed in a dignified manner.

“For a cow to produce milk, you have to give it hay. Europeans go a step further, they play country music to cows to produce milk. We have told them to look after taxpayers the way you look after a good dairy cow,” he stated.

In September, KRA rejected applications from at least 540 firms seeking waivers under the amnesty programme that at the time had recovered KES 8.54 billion from defaulters and tax cheats.

The applications worth KES 287 million were rejected because the income declared was reportedly earned outside the qualifying period of July 1, 2015, to June 30, 2020, for the Voluntary Tax Disclosure Programme (VTDP).

Some applicants also failed to disclose some material facts while others were under investigation for other crimes. 855 firms and 940 individuals had declared their tax liabilities under VTDP in the period under review, with many more expected to come forward ahead of the expiry of the programme in December 2023.

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