Category: Business Daily

The Kenya Bankers Association (KBA) has urged the High Court to suspend a circular by the Commissioner of Insurance, which banned service-based fees paid by insurance firms to the subsidiaries of commercial banks.

In submissions filed in the High Court, KBA argued that the circular effectively invalidates contractual agreements between bancassurance intermediaries and insurers concerning value-added services.

The circular issued on March 25, 2026, stated that any payments made to intermediaries, such as override commissions, administration fees, profit shares, or any similar payments exceeding the limits set under the Insurance Act, are illegal.

However, KBA, through its chief executive officer, Raimond Malonje, contends that the circular wrongly seeks to outlaw service-based fees for auxiliary services, which are separately contracted between insurers and bancassurance intermediaries.

The association pointed out that these fees are not regulated or governed by the Insurance Act or its regulations.

“The fees in question do not constitute brokerage fees or commissions, and as such, they are not prescribed under the Insurance Act or its related provisions,” KBA stated.

Furthermore, KBA questioned the regulator’s actions, pointing out that the Insurance Commissioner had not specified which regulated entities, including bancassurance intermediaries, were being monitored for compliance or found in violation of the Act.

In response, the Commissioner of Insurance, Godfrey Kiptum, opposed the application, arguing that the circular was issued to streamline practices and ensure that audited accounts were properly submitted.

He said an audit had revealed that some insurers were still paying commissions above the amounts prescribed under the Insurance Act.

“The circular provides that insurers should charge premium rates according to the manual filed with the Authority, and that any payments to intermediaries in the form of override commissions, administration fees, profit shares, or any other similar fees that exceed the prescribed limits under the Insurance Act are illegal. Premiums should be remitted to the insurer in full, not net of commissions,” Mr Kiptum said.

The commissioner warned that granting the conservatory order sought by KBA would expose policyholders’ funds to the risk of dissipation and policyholder interests.

Investors who bought the new 30-year Treasury bond were handed a nine percent discount on the price of the security after they demanded a higher interest return than what the State was willing to pay on the paper.

The bond came with a predetermined annual interest rate of 12.5 percent, but investors demanded to be paid 13.75 percent to buy the paper, hence the discount on the price to make up for the return shortfall.

The CBK said that successful bidders on the 30-year bond will pay Sh91.04 per bond unit of Sh100, effectively handing them a discount of Sh8.96 for each unit. A unit of a bond is priced at Sh100, but they can sell above or below this price depending on the prevailing demand when the papers are reopened.

The interest rate outlook has however shifted due to the threat of inflation due to the Iran war, with investors now anticipating higher returns in the near term if the CBK is forced to raise the base rate to fight higher inflation.

It also means that the cost of borrowing for government will go up due to the cash ceded in offering the discounts to investors.

For investors however, the lower prices are a direct upfront gain, considering that they will be paid interest and maturity settlements on the full face value of the bonds.

In the bonds market, interest rates and prices have an inverse relationship, where a fall in one results in an increase in the other.

Ideally, when the investor’s rate demands match what the government is willing to pay for a security, the buyer would pay exactly the face value of the security.

However, when investors ask for a return that is higher than a bond’s actual coupon or interest rate, the CBK offers a discount on the bond’s price to compensate the investors for accepting to earn below their desired return.

Alternatively, when investors indicate they are willing to take a return that is lower than a bond’s coupon rate, they end up paying a price premium to the CBK in order to secure the bond.

The CBK was thus forced to offer the price discount to attract buyers to its April issuance, which targeted Sh20 billion from the new bond and a reopened 30-year bond that was first sold in 2011 at an annual interest rate of 12 percent.

The issuance raised Sh30.06 billion from investor bids of Sh38 billion from the two bonds. The new 30-year bond netted Sh23.5 billion from offers worth Sh31.3 billion, while the reopened paper raised Sh6.6 billion from offers of Sh7.05 billion.

Similar to the new bond, the 2011 paper was also sold at a discount of Sh1.91 per unit of Sh100, after buyers demanded a return of 12.99 percent compared to its actual interest rate of 12.5 percent.

The government is collecting net of Sh27.82 billion from the two bonds, handing investors Sh2.24 billion in discounts on the papers.

President William Ruto’s abrupt reversal order on value-added tax (VAT) on fuel, triggered an overnight scramble among oil marketers seeking to reconfigure their systems, amid concerns about unpredictable policy shifts in the Kenyan business space.

The abrupt decision to halve VAT on petroleum products from 16 percent to 8 percent-announced late Wednesday and effected at midnight-offered immediate relief to motorists, but left firms grappling with operational and legal complexities after two days of shifting tax signals.

Super petrol in Nairobi fell by Sh9.37 to Sh197.60 a litre in the latest review by the Energy and Petroleum Regulatory Authority (Epra), while diesel declined by Sh10.21 to Sh196.63. The reductions came barely 24 hours after prices had surged past Sh206 per litre under a 13 percent VAT regime, itself a short-lived revision from the statutory 16 percent rate.

But behind the pump price relief lies a deeper disruption within the fuel supply chain, where companies have had to overhaul complex IT and accounting systems multiple times within days.

A former chief executive at a major oil marketing company said the rapid changes triggered a round-the-clock systems overhaul across the industry.

‘The issue of VAT [changes] is not just financial-it is an IT issue,’ the ex-senior official, with vast experience in the workings of the industry, told the Business Daily.

‘Teams have been working through the night to simulate changes, deploy them and confirm they are working across all branches. One CEO, who is a friend of mine, left the office at 5am,” the source added.

The disruption has been amplified by the integration of oil marketers’ systems with those of the Kenya Revenue Authority’s Electronic Tax Invoice Management System (eTIMS) fuel module, a reform designed to tighten compliance but now complicating rapid tax adjustments.

Tax experts say the sequencing of policy changes-from 16 percent to 13 percent and then to 8 percent within a narrow window-has strained both compliance systems and business planning assumptions.

Alex Kanyi, a tax partner at Cliffe Dekker Hofmeyr (CDH), said while firms had anticipated rising global oil prices, they had not expected such abrupt and repeated shifts in the VAT rate.

‘There is a process to how these systems are configured, especially after integration with KRA,’ Mr Kanyi said on the telephone.

‘They were aligned to 16 percent. Moving to 13 percent would already require reconfiguration, but before firms could fully adjust, the rate was again reduced to 8 percent.’

He added that the 8 percent rate, having existed previously, may be easier to implement technically than the interim 13 percent.

However, the quick succession of changes has introduced operational complexity, particularly for firms relying on external service providers to manage enterprise resource planning systems.

‘You have external providers who must come in to adjust these systems each time the rate changes, and that comes at a cost,’ Mr Kanyi said.

Smaller oil marketers are expected to bear the brunt of the disruption as they lack the financial and technical capacity of larger firms to quickly adapt to regulatory shocks.

Besides the operational challenges, the latest tax changes is also raising legal and policy questions about the consistency of Kenya’s fiscal framework.

Under the VAT Act, the National Treasury is empowered to vary the VAT rate within a defined band to enhance predictability for businesses. However, analysts note that the move to eight percent appears to stretch that framework, potentially undermining the very certainty the provision was designed to guarantee.

‘The law was meant to provide predictability by capping how far the rate could move,’ Mr Kanyi said. ‘But the way this has been implemented does not seem anchored on that predictability.’

The development underscores a broader tension between political responsiveness and policy stability, as the government moves to cushion consumers amid rising global oil prices and a high cost of living.

The abrupt VAT cut followed a public backlash after fuel prices hit record highs earlier this week, prompting swift intervention by the National Treasury through a legal notice issued by Treasury Cabinet Secretary John Mbadi.

While the temporary reduction is expected to ease inflationary pressure in the short term, particularly in transport and food prices, tax experts warn that frequent and abrupt tax changes risk distorting market signals and complicating long-term planning for businesses across sectors, from logistics to manufacturing.

Former top officials of the Airports Sacco have defaulted on Sh49.99 million loans tapped from the organisation, a report by the supervisory committee revealed, raising questions over the credit risk management of the institution.

The report on the sacco, whose core membership is drawn from Kenya Airports Authority (KAA) employees, shows that recovery efforts have yielded little progress, even as it flagged weaknesses in the management of outstanding loans worth Sh50.04 million borrowed by current staff.

For the loans tapped by ex-staff, no amount was recovered in the year ended December 2025.

The committee warned that continued delay in the recovery of the loans exposes the sacco to ‘significant financial loss and erosion of members’ funds.’

The report shows that a former chief executive allegedly defaulted on a Sh26.96 million loan, followed by a former treasurer (Sh9.36 million) and a former chairman (Sh2.44 million). Other former staff of the sacco, which started in March 1994, have defaulted on Sh11.21 million loans.

‘The loans remain largely unrecovered and continue to pose a significant credit risk to the society,’ notes the report.

The disclosures point to the insider lending risks for saccos, especially where senior officials award themselves loans beyond what their deposits allow.

A similar case to Airports Sacco played out at Kenya Union of Savings and Credit Co-operatives (Kuscco) where Sh192.8 million insider loans to senior officials formed part of the heist that left the umbrella body for saccos insolvent to the tune of Sh12.5 billion.

The report adds that Airports Sacco has reported the former officials to the Co-operative Tribunal to try to recover the amount. The committee has further recommended exploring additional legal and recovery mechanisms and providing periodic progress reports to members on the status of recovery efforts.

The report shows that the current staff has borrowed Sh50.04 million, with the loans performing and fully guaranteed.

However, the supervisory committee has observed that some staff have tapped loans with a maturity period beyond their retirement age or contractual period, raising fears of a future wave of defaults when they exit.

‘The supervisory committee further notes that some insider loan facilities extend beyond the retirement age of certain board members and staff, while others extend beyond the contractual employment period of some borrowers,’ notes the report.

The committee adds that while the loans are guaranteed and performing, the sacco’s board and management should strengthen credit risk management and loan structuring policies to ensure repayment periods are aligned with retirement age, employment tenure and borrowers’ repayment capacity.

It wants the credit policy reviewed to allow only well-secured members with demonstrated repayment capacity to access loans beyond retirement age.

The Sacco Societies Act allows saccos to grant loans to their employees and board members on condition that the terms are the same as those applied to members.

The rules bar the employees or directors from participating in the approval process or being guarantors.

‘No director, officer, employee, or member of the board of a sacco society shall act as a guarantor of any person with respect to a loan advanced or credit facility granted to a person by that society,’ reads the Act.

As policymakers, government leaders and private sector players gathered in Nairobi this past week during the 2026 Kenya International Investment Conference, one of the most profound sessions was on how Kenya can leverage the potential of Special Economic Zones (SEZs) to accelerate investment and scale competitive manufacturing.

Undoubtedly, Africa is experiencing a significant investment shift. While Asia remains the largest recipient of global foreign direct investment (FDI), Africa continues to record fastest growth in recent years.

According to the UNCTAD World Investment Report 2025, Africa attracted record FDI inflows of $97 billion in 2024, a 75 percent year-on-year increase spread across 45 countries targeting infrastructure, climate finance, and fintech.

Kenya sits at the centre of this transformation as the country’s trade volumes reached Sh3.8 trillion and earnings rose to about Sh1.1 trillion in 2024.

Although these figures demonstrate commercial momentum, they also expose structural imbalance because exports remain largely raw or semi-processed, while imports are mainly high-value manufactured goods and machinery.

The development of SEZs illustrates how infrastructure and policy can converge to create a regional production hub.

While the ambition is sound and investor interest is growing, structured financing remains the critical factor to fully unlock Kenya’s industrial potential.

An SEZ is not defined by land allocation and fiscal incentives alone rather by its integrated industrial ecosystem that must function seamlessly from foundational infrastructure to export markets. To operate effectively, trunk investments in roads, bulk water systems, reliable and competitively priced power, waste management and digital connectivity must be financed well before factories reach scale.

Once that base is secured, anchor investors require long-tenor project finance, structured foreign currency facilities to import capital equipment and trade instruments that link production to continental and global markets. Similarly, MSMEs surrounding these anchors depend on working capital to supply packaging, transport, fabrication, maintenance and intermediate inputs that sustain daily industrial activity.

Such layered requirements expose the limits of conventional financing models. Commercial banks operate within prudential frameworks that restrict tenor exposure and sector concentration, thereby constraining their ability to independently finance long-gestation infrastructure.

Development finance institutions provide catalytic and patient capital, yet their mandates are designed to crowd in private investment rather than substitute for it. Consequently, without deliberate coordination between these actors, industrial ambition can outpace financial structuring, delay implementation and weaken investor confidence.

For this reason, structured capital provides the essential bridge between policy vision and industrial delivery.

Through blended finance platforms, partial guarantees, syndicated facilities and risk-sharing instruments, commercial banks can extend longer tenors while preserving balance sheet resilience. In parallel, dedicated foreign currency lines mitigate exchange rate volatility for manufacturers importing machinery, stabilising project economics.

Climate-aligned funding further supports renewable-powered production, strengthening competitiveness in markets where sustainability standards increasingly shape procurement decisions.

Equally important, supply chain finance integrates SMEs into formal industrial value chains, reinforcing domestic linkages and expanding participation in growth. When capital is structured with discipline and foresight, SEZs evolve from policy constructs into bankable industrial platforms capable of attracting sustained investment.

Such frameworks demonstrate how financial institutions can lead from the front in national industrialisation. When infrastructure risk is syndicated and partially guaranteed, projects become more bankable.

The opportunity before us is to align policy ambition with innovative financial architecture that brings together government, development partners, and private capital. If this alignment is achieved, SEZs will not simply be industrial projects but will emerge as the engines that power Kenya’s transition into a manufacturing-led, export-driven economy.

Dividends are becoming a central pillar of wealth creation, beyond share price gains. As listed firms, particularly banks, ramp up shareholder payouts, Make Money explores how investors can position for steady dividend income.

AIB-AXYS Africa Senior Research Analyst Joseph Muriithi breaks down the mechanics behind dividend investing.

The entry of new fund managers has cut the dominance of Kenya’s old guard in the unit trust funds/collective investment schemes, as competition intensifies.

CIC, NCBA, Britam, Sanlam and ICEA unit trust funds have largely lost their market share, with their combined market share dipping to 49.5 percent as of December 2025 from 82.28 percent in December 2021.

New entrants, including Standard Investment, Etica, Ziidi Money Market Fund, and Nabo Africa Funds, have eaten into the market share of the top shots, now controlling a 5.9 percent stake.

Stiff competition in the collective investments space has seen the number of approved schemes rising to 59 in December 2025 from 29 previously.

The newer funds have also brought with them fresh asset classes like special funds which have grown in appeal among local investors.

‘Back in the day, we only had money market funds (MMFs). Now we can see that the second largest fund is a special fund and the top manager has benefitted from partnerships,’ said Etica Capital Portfolio Manager Kenneth Maina.

‘This also shows that investor knowledge has changed over time to where we are now seeing investors taking on riskier asset classes.’

CIC Unit Trust Scheme, which was the largest unit trust fund in 2021 with a market share of 41.79 percent has since fallen to third place with a smaller share of 13.5 percent as of December 2025 as per regulatory filings.

NCBA, Britam and ICEA have also marked a drop from 13.37 percent, 10.82 percent and 9.91 percent respectively to 6.9 percent, seven percent and three percent.

Sanlam Unit Trust Scheme is the only outlier among the old guard, growing its market share from 6.39 percent in December 2021 to 19.1 percent to become the largest collective investment scheme with assets under management of Sh144.3 billion.

Sanlam’s rise was aided by partnerships with other financial institutions including the Standard Chartered Bank, which has helped grow the fund manager’s client base and asset under management (AUM).

Standard Investment Trust Fund which offers the MansaX fund has meanwhile emerged as the second largest unit trust fund with an AUM of Sh125.3 billion as of December 2025.

The scheme pioneered special funds in the market beginning in 2019 hence its growth signifies the rising appeal for riskier asset classes among investing Kenyans.

New fund managers have taken up significant market shares in recent years with Etica, Ziidi Money Market Fund and Nabo Africa Funds having an AUM of more than Sh10 billion each.

The top three schemes, Sanlam, Standard Investment, and CIC, collectively control nearly half of the unit trust market or a 49.1 percent market share while the top five funds account for 63.1 percent of total AUM.

The top 10 schemes meanwhile control 80.1 percent of the market. The total assets under management held by fund managers as of December 31, 2025, was Sh756.2 billion.

The Capital Markets Authority (CMA) credits the 11 percent increase in AUM from Sh679.6 billion reported in September 2025 to the creation of additional funds and increased marketing.

‘The increase can also be attributed to intensified marketing efforts by the fund managers,’ CMA said.

Collective investment schemes pool funds from multiple investors, creating units which then earn a return for the investors.

The funds primarily invest in short-term instruments like Treasury bills, fixed bank deposits, and equities/stocks.

The Court of Appeal has maintained that there would be no automatic equal division of matrimonial property, dealing a blow to a woman who had sought half of a Sh179 million estate in a bitter divorce case.

In a judgment that reinforces the legal position on matrimonial property division, appellate judges upheld a High Court decision awarding the woman only 25 percent of the marital assets while her ex-husband retained 75 percent, based on their respective contributions to the marriage.

The three-judge bench emphasised that property division must reflect proven contributions – both financial and non-financial – rather than assumptions of equal entitlement.

“It is a fatal misconception for a man or woman to think that being married is a passport to 50 percent of matrimonial wealth,” the judges ruled. “Contributions must be demonstrated, not merely claimed.”

They stated: “It is not enough for a party to say they have contributed when they have nothing to show for such contribution, be it monetary or non-monetary, beyond their say so.’

The case involved a high-flying corporate executive and his wife, whose 14-year marriage spanned seven countries before collapsing in 2012. Court records show the couple lived in Kenya, Tanzania, the United Kingdom, China, Cambodia, Indonesia, and Ethiopia during their union.

At the centre of the dispute were prime properties, including a four-bedroom house in Karen, a three-bedroom semi-detached house in the UK, beach land in Shimoni, Kwale, cash in multiple bank accounts in Kenya, the UK, and Indonesia.

Also at stake were investments accumulated during the marriage, including two luxury vehicles.

According to the court record, the couple blamed each other for the breakdown of the marriage. The man, identified in court papers as Mr JAV, accused the woman, Ms NWM, of willingly refusing to find a job despite her high academic qualifications.

Instead, she spent most of her time indoors, getting inebriated day and night, and eventually became an alcoholic. This led to her being irritable with a bad and uncontrolled temper.

Ms NWM, on her part, accused the ex-husband of being cold, distant, and secretive, and wanting to kill her and their adopted child by poisoning.

Ms NWM had sought an equal share of the property, arguing her homemaking role and support for her husband’s international career constituted a substantial non-financial contribution.

Her ex-husband countered that he was the sole financial provider, presenting bank records showing earnings exceeding Sh179 million.

He accused her of withdrawing Sh42 million from joint accounts as their marriage crumbled.

The High Court in 2018 found the husband contributed 95 percent financially, while the wife’s monetary input was just five percent. However, it recognised her non-monetary contributions, including childcare and supervising the construction of their Karen home, awarding her 25 percent of the estate.

In her appeal, Ms NWM argued the trial judge undervalued non-financial contributions and failed to apply constitutional principles of spousal equality. She insisted that jointly registered property should be presumed equally owned.

The appellate court dismissed these arguments, ruling that equality in marriage does not automatically mean equal property shares. The judges noted that the husband had provided detailed financial records proving he funded nearly all acquisitions.

‘It is not enough for a party to say they have contributed when they have nothing to show for such a contribution,’ they added.

The court also held that the presumption of equal ownership in jointly registered property can be rebutted by evidence showing unequal contribution. In this case, the judges ruled that the husband had successfully displaced that presumption.

On the Sh42 million withdrawals, the court agreed with the High Court that the money should be treated as part of Ms NWM’s share since she could not account for its use.

The judges also rejected her bid for the Karen home, noting this would push her share to nearly 80 percent, far beyond what her contributions warranted.

The court concluded that the 25:75 division was fair and consistent with the evidence presented.

It also rejected claims that the trial court ignored the current legal framework, finding that it properly applied the law on matrimonial property.

Article 201 of the Constitution requires that public finances be utilised prudently, in a manner that is fair, transparent and cost-effective. But it is never quite so.

Very often, we receive updates from the Auditor General pointing to improper use of budgetary allocations in public projects, leading to either no or substandard outcomes. It is not unusual to hear, for instance, of infrastructure initiatives that were started but stalled midway through because of insufficient resources.

Sometimes, private contractors pull out and leave in frustration after spending hefty capital on public projects, only to realise that they cannot be compensated for various reasons. The private contractors who knowingly deploy substandard work and get paid for it, only for dire consequences to follow soon after, leaving the contracting authority in the mud.

Public initiatives are now subject to intense scrutiny. For private sector players seeking public contracts, it is increasingly important to rigorously review tender applications and awards to avoid unwelcome surprises at the end. The same applies to awarding institutions because the success or failure of any public contract is a shared outcome.

One of the key facets of contracts in public procurement is that in all instances, the contract extends beyond the signed agreement. The tender document, any addenda, and letter of award together form the full contractual framework.

In many cases, key performance obligations are embedded deep within these documents and overlooking them can lead to compliance failures or disputes over scope and delivery. Taking a holistic view helps ensure that both parties fully understand what is required.

Clarity in service definition is another area that cannot be overlooked. Services must be described in precise, measurable terms, with clear performance indicators and deliverables. Vague or generic descriptions not only hinder accountability but also complicate contract management and evaluation.

The question of data ownership, particularly after termination, also benefits from early clarity. In most cases, the procuring entity remains the data controller, unless the contract provides otherwise. Setting out rights and obligations around access, use and retention of data helps avoid disputes at the end of the contract.

Agreements and related records should be well-maintained to ensure they can be relied upon in the event of an audit or dispute.

Thousands of taxpayers were granted penalty waivers on Sh4.76 billion owed to the Kenya Revenue Authority (KRA) in breach of amnesty rules, raising questions on the handling of the scheme.

The Auditor-General’s report on the KRA for the year to June 2025 shows that 4,677 taxpayers ben-efited from the scheme without having a repayment plan for the billions of shillings owed in principal taxes.

The audit shows the taxpayers, including individuals and businesses, were forgiven Sh290.48 million penalties and interest, marking a breach of the law since they had not settled the principal taxes.

The report notes that the KRA breached the Tax Procedures (Amendment) Act, 2024, which sets conditions for forgiveness of penalties and interest, including the requirement that one must have fully settled the principal tax or shared a repayment plan.

KRA staff have been previously accused of helping to fraudulently clear cargo and alter records to help people dodge tax payments, leading to revenue losses.

The tax amnesty scheme was aimed at boosting revenues amid pressure on the KRA to weed out tax evaders and raise collections through increased compliance.

‘Review of the tax amnesty uptake indicated that it was granted on penalties, interest and fines of Sh290.48 million to 4,677 taxpayers, despite the taxpayers owing the authority Sh4.75 billion in outstanding principal taxes, relating to tax periods up to 31 December, 2023,’ says the audit report.

‘This was contrary to the Tax Procedures (Amendment) Act, 2024, which requires that, to qualify for amnesty, a taxpayer must have either fully paid all principal taxes or have an approved payment plan under which the outstanding principal taxes would be fully settled by 30 June, 2025.’

Under the law, taxpayers qualify for amnesty after settling the principal tax or tabling an approved payment plan that guarantees full settlement of the principal before June 30, 2025.

The audit, however, indicates that these conditions were not met, yet the penalties were written off.

The programme was first introduced in 2023, granting tax amnesty on penalties and interest for periods up to the end of December 2022. It initially ran until June 2024 before being extended to June 30, 2025, allowing for the waiver of penalties and interest accrued on tax debts for periods up to the end of December 2023.

The KRA has in the past praised the programme for generating Sh29 billion while bringing 3.5 million taxpayers into compliance-a performance it termed as ‘a proof to our balanced approach of enforcement and facilitation.’

The audit findings raise questions on the credibility of the amnesty programme, which was designed to encourage tax compliance while helping the KRA collect principal taxes.

The audit further raises red flags over how the amnesty was implemented in the tax system. It found that there was use of direct record deletions instead of standard accounting procedures, where the trail must remain visible in the system.

The audit found that tax relief amounting to Sh1.29 billion was processed through direct deletion from taxpayers’ ledgers instead of processing them through credit entries.

‘Further, a tax amnesty of Sh1,288,365,274 was implemented by direct deletion from taxpayer ledgers rather than being offset through credit entries. ln the circumstances, management was in breach of the law,’ said the audit.

Under accounting rules of double entry, the tax amnesty should have been recorded as a credit against a taxpayer’s account, preserving an audit trail that shows the original liability, the relief granted and the resulting balance. Direct deletion removes the liability without leaving a clear record of the adjustment, making it difficult to track the application of the amnesty across individual accounts.

The tax amnesty programme was intended to unlock collections from non-compliant taxpayers as part of the country’s tax administration reforms aimed at expanding the revenue base and reducing reliance on debt.

The spotlight on the handling of the amnesty programme came in the period Auditor-General Nancy Gathungu disclosed that the KRA had issued tax compliance certificates (TCCs) to 3,054 taxpayers despite them having Sh3.12 billion tax arrears and without a payment plan in place.

The report indicates that the affected taxpayers had not objected to the tax assessments or entered into any structured payment plans-conditions that would have allowed them to legally qualify for the certificates.

Ms Gathungu’s findings come at a time when the government is under pressure to boost revenue collection amid rising fiscal constraints and public scrutiny over tax fairness.

State House has previously accused the tax collection agency’s staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.

President William Ruto also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past to prevent the government from sealing loopholes.

In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming other nations like South Africa as it struggles to widen the tax net.

The KRA’s revenue collections were Sh2.257 trillion in the financial year ended June 2025 against the targeted Sh2.305 trillion, being a Sh48 billion shortfall.

In the current financial year ending June 2026, the KRA is banking on increased deployment of technology and other enforcement tools to raise Sh932 billion in the final three months in a bid to meet its Sh2.97 trillion annual revenue target.

The aggressive final-quarter push comes after the agency collected Sh2.038 trillion by the end of March, the first time it has crossed the Sh2 trillion mark within nine months.