11 public universities caught in Ksh.9.7B tax evasion racket

Six university vice chancellors risk prosecution for failing to remit Pay As You Earn (PAYE) tax to the Kenya Revenue Authority (KRA).

The six are part of 11 public universities that owe the taxman a cumulative Ksh.9.7 billion in arrears.

They include; University of Nairobi, Kenyatta University, Technical University of Kenya and Jomo Kenyatta University of Agriculture and Technology have been slapped with tax demands running into billions of shillings

Others include Moi University, Egerton University, Garissa University College and Pwani University, Multimedia University, the controversial Maasai Mara University that is facing corruption allegations and Rongo University.

The 11 public universities cumulatively owe KRA Ksh.9.7 billion. To recover these monies, the taxman has warned the institutions vice chancellors who are the accounting officers of possible prosecution.

Equally KRA is attaching bank accounts of the institutions to recover the debt

As such, six of the universities have moved to settle their tax arrears.

Kenyatta University has paid Ksh.120 million out of Ksh.2.1 billion in tax arrears.

The University of Nairobi has settled Ksh.221 million from Ksh.3.5 billion outstanding tax arrears with JKUAT paying Ksh.295 million from the pending Ksh.890 million.

Multimedia University has made a payment of Ksh.13.2 million while Garissa University College has paid the taxman half of its debt at Ksh.10 million.

Pwani University has covered over 70 per cent of its tax arrears remitting Ksh.81 million out of its pending Ksh.99 million — the six universities settling a total of Ksh.730 million.

The tax arrears are mainly from staffers pay as you earn (PAYE) tax.

Technical University of Kenya, Egerton university, corruption-riddled Maasai Mara University, Moi University and Rongo University are the defaulting universities yet to make any payment.

Egerton University, in a statement, admitted financial strain on its part with the University’s Vice Chancellor Professor Rose Mwonya citing a decline in the privately sponsored students programme that earned them lucrative income and government reduction in capitation to public universities from 2016 as having greatly affected the institution’s finances.

The Egerton VC, however, says the university has negotiated with KRA on the modalities of paying its tax arrears to ensure smooth running.

Companies trading with the universities are equally on KRA’s radar with the taxman warning of prosecuting directors who have failed to remit withholding tax as per the law.

Five vice chancellors and senior officials of the universities are being probed on their tax compliance status.

With a target of more than Ksh.2 trillion to raise in the current financial year, the tax man is confident that its recent measures in the crackdown on tax evasion will yield fruit.