Category: Business Daily

It has become a form of interrogation from landlords and agents.

Prospective tenants are being asked questions that go beyond the basics: What is your salary range? Where do you work? Why are you leaving your current house? Are you married, and do you have children or pets?

For many, some of these questions feel intrusive. Yet for landlords, the stakes have changed. Court rulings and hefty fines against unlawful evictions have made them cautious, prompting stricter screening long before a tenancy agreement is signed.

James Odenyo, a property consultant, explains that over the years, due diligence on rentals has become more stringent, following the anti-money laundering rules, terrorism concerns, and data protection laws.

‘Landlords are no longer simply interested in whether someone is willing or able to pay rent. Who are you as an individual? Who are you bringing into the property?’ he says.

A tenant paying Sh1.2 million in rent, for instance, may trigger checks with banks to confirm the source of funds.

A series of court and tribunal decisions has made clear that landlords must follow due process when seeking to recover their properties.

For instance, in 2026, tenants in Nairobi sued a landlord for eviction. They had been removed without a court order. The two had occupied the Nairobi house since 1985. The Environment and Land Court ordered the two occupants to be restored to a Nairobi City County house.

‘The process ordinarily starts with the landlord identifying a lawful ground for terminating the tenancy and issuing the tenant with a properly drafted written notice,’ explains Chris Gichangi, a partner at G.M Gamma Advocates LLP. ‘If the tenant fails to comply with the notice, the landlord must institute proceedings before the appropriate court or tribunal seeking orders for termination of the tenancy and return of possession of the premises.’

He emphasises that eviction can be enforced only after orders are issued.

‘A tenant’s failure to pay rent does not confer upon the landlord an automatic right of immediate eviction. Non-payment can constitute grounds for termination, but the landlord must still comply with the applicable notice requirements and obtain the necessary orders before recovering possession.’

The consequences of ignoring this process can be severe. ‘Changing locks, blocking access, removing belongings, disconnecting electricity or water, dismantling parts of the premises or using coercion to force a tenant out could amount to unlawful eviction,’ Mr Gichangi says.

Landlords and agents, particularly in upmarket areas, are increasingly trying to avoid such disputes, which can leave them without rental income while a case is in court. A legal fight can also damage the reputation of a property.

The shift in Nairobi is similar to what happens in countries such as the UK, Germany and the US, where landlords and letting agents routinely screen prospective tenants for income, employment, rental history, creditworthiness and, in some cases, identity and immigration status before approving a lease.

Johnson Denge, a real estate investment analyst, says Kenyan landlords and agents even ask prospective tenants for employment letters, payslips and KRA PIN details.

‘For a tenant seeking a long-term occupancy, a landlord may want to establish that the prospective tenant has the means to pay rent,’ he explains.

Its downside

However, for some renters, the screening process can mean losing out on a dream home despite being able to afford it.

Mr Denge points to the general rule of thumb that about 30 per cent of income goes towards housing, allowing a person to live within their means. But someone who lists only one source of income, despite sharing household expenses with a spouse, may appear less able to afford the property and be dropped from the shortlist of potential renters.

Others may choose not to complete the forms at all, wary of handing over sensitive personal and financial information, and risk being left out of consideration.

‘Take a household where both spouses earn Sh50,000. Together, they have an income of Sh100,000. But a landlord may assess the application based on the income of one person rather than considering the household’s combined earnings,’ he says.

How to protect yourself

As landlords seek to know not just whether rent can be paid, but who exactly is moving in, experts say they might wish to start scrutinising the household’s combined income.

For a business tenant, they may want to check the activities against zoning rules, and even ascertain the number of cars to assess parking capacity. The intention is to avoid the costly and protracted battles that can arise when eviction is contested.

As Mr Gichangi points out, disputes over notices, injunctions, appeals and judicial backlogs can stretch proceedings for years.

Landlords, Mr Gichangi adds, can protect themselves by keeping proper tenancy agreements, maintaining accurate rent records, documenting breaches and arrears, issuing properly drafted notices and seeking orders from the appropriate court or tribunal.

‘The most frequent errors made by landlords arise from attempts to circumvent the legal process to obtain possession of their property more quickly,’ he says.

‘These actions frequently convert an otherwise legitimate claim into an unlawful eviction dispute and expose landlords to substantial liability.’

What kind of economy can Kenya build when an ever-growing share of public resources is committed to servicing yesterday’s borrowing? Public debt had reached Sh12.86 trillion by April this year, equivalent to 69.4 per cent of the Gross Domestic Product (GDP), according to Treasury.

The more important question is not simply how much Kenya owes, but what the country is getting for the debt. Borrowing to finance productive infrastructure can generate growth and revenue.

However, borrowing increasingly to refinance existing obligations creates a vicious circle – borrow to repay, tax to borrow and borrow again to service the debt. Debt then becomes a mechanism for postponing rather than solving the fiscal problem.

The imbalance between debt service and development expenditure makes this worrying. When debt repayment absorbs resources that could finance infrastructure, agriculture, healthcare, education and industrialisation, the government sacrifices the investments required to expand the economy.

The issue is, therefore, not debt alone, but whether Kenya is borrowing to transform its productive capacity or simply taking loans to maintain an existing debt structure.

This is where the views of leading economists become relevant. Joseph Stiglitz has argued for stronger mechanisms for sovereign debt restructuring, warning that delayed resolution can deepen socio-economic costs.

Carmen Reinhart’s extensive research on sovereign debt crises demonstrates that restructuring and debt relief can be important components of recovery from debt overhang.

Olivier Blanchard, meanwhile, emphasises that debt sustainability depends not merely on the debt-to-GDP ratio but also on the relationship between economic growth, interest rates and the capacity of the government to stabilise debt.

Kenya should, therefore, begin a serious conversation about orderly sovereign debt restructuring. Note that restructuring is not synonymous with reckless default. It is a negotiated adjustment of maturities, interest rates and repayment schedules designed to restore sustainability and create fiscal space.

The objective is not to escape responsibility for debt, but to prevent repayment from destroying the capacity of the economy to grow.

Barbados provides an important precedent.

Under Prime Minister Mia Mottley, the Caribbean island nation undertook a comprehensive debt restructuring in 2018. The International Monetary Fund (IMF) found that the restructuring substantially reduced debt and financing pressures.

The lesson is not that Kenya should emulate Barbados, but that restructuring can be used as a policy instrument to restore fiscal space when the existing debt structure becomes untenable.

Ghana provides a more recent African example. It completed its domestic debt exchange in 2023 and its Eurobond restructuring the following year, while continuing negotiations with official creditors.

By 2025, the IMF reported significant progress in Ghana’s debt restructuring and improvements in investor confidence. Accra demonstrates that restructuring can be embedded within a broader programme of fiscal consolidation, financial-sector protection and economic recovery.

Ethiopia offers another important African case, though its restructuring is still evolving. After defaulting on its S$1 billion Eurobond in 2023, Ethiopia negotiated with official and private creditors under the G20 Common Framework.

This month, official creditors approved a preliminary agreement with private investors to restructure the Eurobond, bringing Ethiopia closer to emerging from default.

The Ethiopian experience also illustrates that restructuring can be lengthy and politically difficult, particularly where creditors have different interests.

Sri Lanka provides the cautionary lesson. Its 2022 default followed a severe fiscal and balance-of-payments crisis, forcing a comprehensive restructuring of external and domestic obligations.

According to the IMF, external creditors forgave about $3 billion and restructured another $25 billion, while the country subsequently regained access to international bond indices.

The lesson for Kenya is not that default is desirable, but that allowing an unsustainable debt burden to persist can ultimately make adjustment far more painful.

Kenya must, nevertheless, proceed carefully. Banks, pension funds, insurance companies and individual investors hold substantial government securities. A disorderly restructuring could destabilise the financial system and transfer the sovereign crisis into banks and pension funds.

Any restructuring must, therefore, be negotiated, credible and carefully designed to distribute the burden while protecting financial stability.

The fundamental principle should be simple – Kenya should not borrow merely to repay yesterday’s borrowing. Debt should finance assets that increase productivity, employment, exports and future government revenues.

The choice is increasingly between perpetual refinancing – borrowing more, taxing more and sacrificing development – or restructuring the debt burden and using the resulting fiscal space to rebuild productive capacity.

Kenya does not need to restructure its future; it needs to restructure the debt that is preventing it from financing that future.

From the scourge of illicit liquor to the need to reduce alcohol misuse, policymakers and industry players are under pressure to pursue regulation and disciplined enforcement that advance government objectives; protect consumers and society; and preserve the economic contribution of the alcohol industry.

According to the Kenya National Bureau of Statistics Economic Survey 2026, the country’s legal alcohol industry generated Sh40.5 billion in excise revenue in 2025, which is about 24 percent of total domestic excise collection.

It supported activities in manufacturing, agriculture, distribution, retail and hospitality. This contribution could be higher. A 2025 Euromonitor study estimates that counterfeit alcohol costs Kenya Sh14.5 billion in lost tax revenue.

Can Kenya dismantle entrenched illegal markets and protect vulnerable populations through enforcement alone? Is over-regulating the formal alcohol industry pushing consumers towards illicit liquor?

Despite crackdowns, illegal alcohol is estimated to account for around 60 percent of the liquor consumed in Kenya. A recent workshop organised by the Alcoholic Beverages Association of Kenya (ABAK) and state agencies was informed that Nairobi is a major production hub and epicentre of consumption.

During the 2025/26 financial year, state agents in Nairobi seized illicit alcohol, counterfeit bottles, fake excise stamps and raw spirit valued at nearly Sh790 million.

Successful prosecution depends on preserving evidence from the point of seizure through forensic analysis to the court. Standardised digital evidence management, seamless coordination between investigators and prosecutors and expanded testing capacity are critical to preventing cases from collapsing on technicalities and ensuring offenders face meaningful legal consequences.

However, an enforcement-heavy plan reaches a natural limit against highly adaptive criminal networks. As raids intensify, illicit operators shift production to private residences, recycle genuine bottles, produce high-grade fake excise stamps and exploit off-trade channels.

Fiscal policy must acknowledge market realities and economic incentives. The recent reduction of excise duty on Extra Neutral Alcohol to Sh80 per litre is a practical example of how tax policy has narrowed the profit margins enjoyed by illicit mixers and reduce cross-border smuggling.

Enforcement must remain unyielding where children and youth are concerned. This includes strict adherence to the county Alcoholic Drinks Control Acts.

The socio-economic and health costs of counterfeit activity are too significant to ignore. Kenya has shown that multi-agency collaboration works.

In seeking to safeguard public health today, Kenya must ensure its laws, fiscal policies and enforcement mechanisms are calibrated to deliver lasting protection for tomorrow.

Yet even as urbanisation drastically changes the landscape, it has refused to entirely shed the customs that predate the construction boom.

Along roads leading in sit small shops, hardware stores and rental houses. Further inside, newly built apartments and gated communities are emerging among older family homes and open stretches of land.

Students rent modest rooms while families buy four-bedroom houses priced tens of millions of shillings. Developers are putting up apartments as sellers divide former expanses of land into smaller plots.

‘Here, when we talk about gated communities, most of those units will have at least four bedrooms,’ says Linda Mokeira, chief executive of real estate agency Jalisa Limited.

For families seeking more space, developers chasing demand and students looking for cheap accommodation, Ole Kasasi has become an increasingly attractive destination.

Much of this transformation has happened in little more than two decades. For long-time residents and land sellers, however, the history of Ole Kasasi stretches much further back, to a time when the area was largely pastoral land known as Erangau, or Rangau, and the idea of a busy property market was still far off.

Today, the neighbourhood is drawing buyers who want the space and relative tranquillity that have become increasingly difficult to find in the capital.

One of the easiest ways into Ole Kasasi is from the Maasai Lodge stage, where tuk-tuks and taxis ferry residents and visitors into the neighbourhood.

About three kilometres in stands the Ole Kasasi Police Station, one of the area’s best-known landmarks. Around it, small shops, eateries, hardware stores and rental houses line the roads, reflecting the commercial activity that has accompanied the population increase.

For Teketi Kimunyak, a long-time land seller, the story of Ole Kasasi begins with one family and a large tract of land. ‘Originally, Ole Kasasi is tied to the person who owned a major part of the area, almost 1,000 acres,’ he says.

The land was eventually subdivided and sold, bringing in more settlers and gradually changing the character of the area.

In its early years, Ole Kasasi was largely residential and pastoral. The Maasai were the dominant community and commercial activity was limited.

‘People started settling because the place was peaceful, with a lot of fresh air,’ Mr Kimunyak says. ‘At that time most of the people were the Maasai and it was not yet a commercial place until the early 2000s.’

‘Gradually, the place started developing into a town with amenities like African Nazarene University, hospitals, and commercial developments. Rongai also started developing toward Ole Kasasi and the interior part of Kajiado East,’ he says.

Cheap land turns prime property

The transformation is perhaps most visible in land prices. Mr Kimunyak remembers when an acre could be bought for only a few hundred thousand shillings.

‘The land prices are increasing every day, because about 15 years ago you could find an acre for even Sh300,000 to Sh500,000,’ he says.

Today, the figures are measured in millions.

Ms Mokeira says an acre in prime sections can fetch as much as Sh30 million. ‘As you go into the interior, an acre will cost Sh16 million to Sh20 million,’ she says.

Ms Mokeira says an eighth of an acre of land aound Nazarene University all the way down to the Maasai Lodge can cost Sh3.5 million to Sh5 million.

The sharp rise reflects a fundamental change in what buyers are looking for. Ms Mokeira points out that Ole Kasasi offers something increasingly scarce in Nairobi: room to build a standalone home, maintain a compound and still remain within reach of the city.

‘Families want standalone houses, a compound, greenery and a quieter environment,’ she says.

Eager to capitalise on the market demand that is also driven by Kenyans living in the diaspora looking for property investments, developers are increasingly putting up gated communities and multi-unit developments, particularly around the university.

Ms Mokeira says the profile of the prospecive Ole Kasasi property buyer is a Nairobi residents who want to move away from congested neighborhoods without going too far from the capital, as well as.

‘They want to be in a developed area, but without being in squeezed spaces,’ Ms Mokeira says.

A market of two worlds

The university has added another layer to the property market. Student demand has supported the growth of hostels, bedsitters and smaller apartments, creating a steady rental market alongside the more expensive family housing.

The result is a neighbourhood where two very different property markets exist side by side.

A modern four-bedroom house in a gated community can sell for between Sh25 million and Sh35 million, Ms Mokeira says, while standalone homes can reach Sh50 million depending on the size of the compound and quality of construction.

And rents have risen alongside property values.

A one-bedroom unit can rent for between Sh10,000 and Sh25,000 a month, while modern two-bedroom units can exceed Sh35,000. Three-bedroom houses go for around Sh50,000, according to Ms Mokeira.

In gated communities, rents can reach Sh75,000 a month, with some landlords asking as much as Sh100,000 depending on the size of the house, finishes and amenities.

The construction boom has brought shops, hardware stores and other businesses, but it has also exposed gaps in infrastructure and planning.

‘There is a challenge with infrastructure and the sewer system; there is also no proper zoning,’ Ms Mokeira says. ‘You cannot easily say that this is a high rise zone, this is a maisonette zone, etc.’

For homeowners, the absence of clearly defined development patterns can create uncertainty about what may eventually be built next door and how new developments could affect the character and value of existing properties.

Water is another concern, with many residents relying on boreholes to supplement supply.

Yet the rapid construction has also created a local economy of its own.

At a hardware shop in Ole Kasasi, Barnabas Ruto serves a steady mix of homeowners and builders.

‘We sell finishing equipment like toilets, tiles, pipes, and cement. Our biggest clients are homeowners,’ he say, adding that tiles are among the fastest-moving products.

His business is one small example of how the property boom has spread beyond landowners and developers, creating demand for building materials, transport, labour and other services.

Keeping the connection

For all the new houses, roads and rising property prices, Ole Kasasi has not entirely lost its connection to the landscape that existed before the construction boom.

Mr Kimunyak remembers a time when wild animals were part of everyday life for Maasai residents.

‘Interestingly, in our culture, we believe you can only be attacked by a wild animal if you are cursed or there is something bad that you did that does not please God and man,’ he says.

Urbanisation has since pushed much of that wildlife away from the more populated sections.

The herds and remaining open spaces now share the landscape with construction sites, rental apartments and gated communities.

But as more land is subdivided and more houses rise, Ole Kasasi faces a question familiar to many of Nairobi’s expanding suburbs: how much of the character that made the area desirable can survive the development that is making it valuable?

For now, developers, traders, students, and homeowners are focused on getting the best they can from Ole Kasasi.

Taking an organisation’s sustainability reporting from the bare minimum to a differentiated, market-leading position requires planning. There is a motivation for organisations that choose to focus on compliance when it comes to sustainability reporting.

For some organisations, the implementation journey is in its early phase, and therefore their reporting will also reflect the maturity of their overall sustainability journey.

Other organisations are still building capacity, making the necessary investments and determining their sustainability business case.

While these are valid reasons to take a compliance-focused approach to sustainability reporting, organisations cannot remain at a compliance-only level permanently.

Organisations that take a business-case lens to sustainability adoption, and intend to derive full utility from their reporting, will have to set their reporting ambition at the market-leadership level at which the organisation can attract investors.

One important step is to ensure sustainability reporting is deployed internally across an organisation to monitor, manage and measure risks and opportunities, and to preserve value.

Organisations should embed sustainability across their management structures. Sustainability needs to be applied internally in order to build credibility for the transition to leadership in reporting. Paying lip service to sustainability would prevent an organisation from achieving leadership in reporting.

Another important aspect to consider is integrating sustainability in the tools and systems used across every level of the organisation for decision-making.

Organisations should integrate sustainability in their dashboards, thereby enabling them to translate this capability into sustainability reporting easily.

Another consideration is the use of technology within the sustainability reporting. Tech-enabled reporting supports real-time decision-making, helping organisations build resilience and agility.

Attaining leadership in reporting requires alignment with financial reporting. Organisations need to understand the financial effects of sustainability from a strategic perspective.

They must aim to build trust with their stakeholders through relevant, transparent and consistent reporting to attain reporting leadership.

A Kenya Power supplier has lost a Sh317 million tax dispute after a tribunal upheld the taxman’s assessment over unsupported input-tax claims. This brings renewed attention to the company behind a Sh2.9 billion Kenya Power smart metre contract that drew a lot of public debate and scrutiny about three years ago.

The Tax Appeals Tribunal dismissed Harley Berry Limited’s appeal following a finding that it failed to provide documents supporting its claim that the tax assessment was wrong.

‘The appellant failed to file documents to demonstrate that the respondent (Commissioner of Domestic Taxes) erred in confirming the assessment,” the Tribunal said.

Harley Berry is also at the centre of a separate public procurement controversy involving Kenya Power’s Sh2.9 billion smart-metre supply contract awarded in 2023 through the State Department for Public Works.

The company came to public attention after being issued with the contract for 320,800 smart metres, a move that even attracted Parliamentary scrutiny with the Parliament’s Energy Committee seeking the tender evaluation committee minutes, the Principal Secretary’s authorisation and a procurement opinion concerning the award. The parliamentary and Senate inquiries did not establish any corruption or irregularity against Harley Berry in the smart-meter tender.

However, the two matters are separate. The tax case concerned VAT business records and whether input tax claims were properly supported, while the Parliamentary procurement inquiry concerns how the company obtained the meter contract.

The tax dispute began in March 2025 after the Commissioner of Domestic Taxes issued an additional assessment of Sh317.9 million for VAT covering 2022 to 2024.

Harley Berry objected, but KRA confirmed the assessment. The company then appealed, arguing it needed more time to retrieve supporting documents. The company argued that it had not been given enough time to retrieve manual records from its archives and obtain documents from suppliers.

It also said some input VAT could be traced through the iTax and eTIMS systems and should therefore have been allowed.

KRA rejected the argument, saying Harley Berry had filed nil returns from January to July 2022 despite having withholding-VAT credits.

The authority said the company later filed the pending returns, but failed to declare sales linked to withholding VAT certificates.

KRA also said it questioned input VAT claimed from suppliers who were nil filers, non-filers or unregistered for VAT when Harley Berry made the claims.

The authority singled out Coolextreme International Limited and Ndume Chainlinks Limited, saying Harley Berry claimed more input VAT than the suppliers’ declared sales.

KRA further said the company failed to provide supporting documents despite being asked for invoices, supplier confirmations and bank statements. Harley Berry maintained that it had supplied supporting material but needed more time to retrieve manual records.

The Tribunal ruled that the company had not produced sufficient evidence to overturn the assessment.

‘The appellant provided none of the documents needed to support its VAT claims,’ the Tribunal said.

It noted that Harley Berry had filed its notice of objection and KRA’s objection decision, but no documents demonstrating that the disputed input tax was claimable.

‘The highlighted documents cannot demonstrate that input tax was claimable, nor do they demonstrate that the respondent erred in confirming the assessment,’ the Tribunal said.

It added that Harley Berry had been given sufficient time to provide documents showing that the disputed inputs related to taxable supplies. The company failed to discharge its burden of proof.

The Tribunal consequently dismissed the appeal and upheld KRA’s July 25, 2025 objection decision.

The separate Kenya Power smart meter matter attracted Parliamentary inquiry following concerns raised by the Public Procurement Regulatory Authority over alleged irregularities in the award of the Sh2.9 billion smart-meter tender.

A June 2026 Senate report said the framework agreement was implemented through call-off orders, with prices of Sh9,150 for single-phase meters and Sh15,890 for three-phase meters. It said more than 320,000 meters were supplied between October 2023 and February 2024.

The Senate said its inquiry examined the procurement process, compliance with procurement law, local manufacture of smart meters and reforms to Kenya Power’s procurement system.

Kenya Power told senators that it used a Supplies Branch framework contract after facing an acute metre shortage and said Harley Berry had been introduced as a supplier with ready stock.

A Kenya Revenue Authority (KRA) tax audit is one of those events that most businesses would rather not receive notice of. Yet an audit does not necessarily mean that a taxpayer has done something wrong.

KRA is legally empowered to review taxpayers’ affairs to establish whether the correct taxes have been declared and paid. The outcome may be that the taxpayer is found compliant, or it may result in an additional assessment where KRA identifies a tax shortfall.

KRA may undertake returns reviews, comprehensive audits or investigations covering taxes such as income tax, VAT, PAYE, withholding tax, excise duty and customs duty.

A KRA tax audit is essentially an examination of a taxpayer’s financial and tax affairs to determine whether the taxpayer has complied with its obligations under the applicable tax laws. The process may involve reviewing tax returns, accounting records, invoices, bank information, contracts, payroll records and other documents relevant to determining the taxpayer’s liability.

The Tax Procedures Act, 2015 (TPA) gives the Commissioner broad powers to administer tax laws and obtain information relevant to determining a taxpayer’s liability. Importantly, the TPA defines a ‘document’ broadly to include books of account, records, bank statements, receipts, invoices, vouchers, contracts, agreements, tax returns, tax invoices and electronic data.

There is no general rule requiring KRA to audit every taxpayer after a particular number of years. In practice, taxpayers may be selected for compliance checks, returns reviews, audits or investigations depending on KRA’s compliance mandate and risk assessment.

This means that a taxpayer should not assume that being audited once means it will not be audited again, or that not having been audited for several years means the business is unlikely to be selected. Businesses should instead maintain their tax records on an ongoing basis.

The TPA generally requires taxpayers to retain tax documents for five years from the end of the relevant reporting period, subject to statutory exceptions, including where the documents relate to an amended assessment or ongoing proceedings. Further, the Commissioner may assess outside the ordinary five-year period in cases involving gross or wilful neglect, evasion or fraud.

The best time to prepare for a KRA audit is before the audit notice arrives. A taxpayer should first confirm that its tax registrations accurately reflect the obligations applicable to the business. This includes reviewing the taxpayer’s PIN, VAT registration and other relevant tax obligations.

The taxpayer should then conduct an internal review of its tax returns and payments. Returns should be reconciled against the underlying accounting records, while payments should be matched against the relevant tax liabilities and payment receipts. Any outstanding balances, unexplained differences or inconsistencies should be identified early.

Businesses should also ensure that their tax invoices are properly maintained and compliant. This is particularly important in relation to VAT and income tax and the increasing integration of electronic invoicing requirements.

KRA currently requires applicable taxpayers to comply with eTIMS/TIMS requirements, and from the 2026 year of income, KRA has stated that declared business income and expenses must be supported by valid eTIMs invoices.

Other records that deserve particular attention include contracts, bank statements and the general ledger. These records should tell a consistent story. Where amounts declared in tax returns cannot be reconciled with the general ledger or bank transactions, the discrepancy may attract further questions from KRA.

Payroll should also be reviewed carefully, particularly PAYE, employee benefits, allowances and other employment-related payments.

Similarly, withholding tax records should be reconciled against invoices, payment schedules, certificates and the relevant returns.

For VAT, businesses should reconcile sales, purchases, output VAT, input VAT, tax invoices and VAT returns. Finally, related-party transactions deserve special attention because transactions involving connected persons may raise questions relating to transfer pricing, deductibility, withholding tax and the arm’s-length principle.

During the Audit: control the process

Once an audit begins, businesses should establish a clear communication protocol. Ideally, one person or a designated team member should coordinate communication with KRA. This avoids contradictory responses and ensures that every request is properly recorded and addressed.

Document production should also be controlled. A taxpayer should understand precisely what KRA has requested before producing documents. Requests should be logged, assigned to responsible persons and tracked until fully responded to.

The objective is not to withhold relevant information from KRA, but to ensure that the information provided is accurate, complete and responsive to the request. Every submission should preferably be accompanied by an evidence trail showing what was provided, when it was provided and to whom.

Legal advice is particularly important where an audit involves potentially contentious issues. Taxpayers should also consider whether particular communications or documents attract legal professional privilege. Privilege should not, however, be asserted casually. The nature of the communication and the capacity in which the legal practitioner was acting should be considered carefully.

Before any substantive response is sent to KRA, management should undertake a response review. A seemingly harmless explanation may have wider tax consequences if it inadvertently contradicts information previously submitted or creates an admission that was not intended.

After the Audit: do not ignore the findings

Completion of the audit does not necessarily mean the matter is over. KRA may communicate its findings which the taxpayer is required to respond to. In the event that the KRA is not satisfied with the findings issued, KRA may consider there is additional tax payable and thus issue a tax demand/ assessment.

The taxpayer should carefully review the basis of the assessment rather than simply accepting or rejecting it. The taxpayer should establish which transactions are disputed, the statutory basis relied upon by KRA, the computation of the additional tax, penalties and interest, and whether the evidence supports the assessment.

Where the taxpayer disagrees with a tax decision, the Tax Procedures Act requires the taxpayer to first lodge an objection with the Commissioner. Section 51 of the Tax Procedures Act provides for an objection within 30 days of notification of the tax decision, and the objection must set out the grounds of objection and the amendments required.

This stage should be approached seriously because an objection is not merely a letter stating that the taxpayer disagrees with KRA. It should be properly supported by the relevant facts/ grounds of objection, documents and legal arguments.

Where appropriate, the taxpayer and KRA may explore settlement or alternative resolution of the disputed issues. However, settlement should be considered carefully, particularly where the taxpayer has strong evidence and legal grounds to challenge the assessment.

If the dispute remains unresolved at the objection stage, the taxpayer may proceed to the Tax Appeals Tribunal in accordance with the Tax Procedures Act and the Tax Appeals Tribunal Act.

An appeal relating to an assessment generally requires the taxpayer to have paid the undisputed tax or entered into an arrangement with the Commissioner regarding payment of the undisputed amount. The statutory timelines are strict; recent Tribunal decisions continue to emphasize the importance of filing an appeal within the prescribed period. In the event that the dispute is not resolved at the Tribunal, other avenues for resolution include the High Court, Court of Appeal and the Supreme Court in exceptional circumstances.

A KRA audit should not be treated as a crisis that begins when the first audit letter arrives. It is a process for which businesses should prepare continuously.

The strongest position for a taxpayer is one where its registrations, returns, payments, invoices, contracts, bank records, ledgers, payroll, withholding tax, VAT and related-party transactions can all be reconciled and supported by contemporaneous evidence.

More importantly, taxpayers should remember that an audit is not simply an accounting exercise. It is a legal and evidentiary process.

How documents are produced, how explanations are framed, how requests are managed and how an assessment is challenged can ultimately determine whether a tax dispute is resolved efficiently or progresses into lengthy litigation.

Good tax compliance is therefore not merely about paying tax. It is also about keeping the evidence that proves why the tax reported and paid is correct.

The Energy committee of the Senate gave the Directorate of Criminal Investigations (DCI), Director of Public Prosecutions (DPP) and other State entities to complete the probe and determine the fate of the three within 60 days amid fears the investigations have gone cold.

The deadline lapses on October 19 in the wake of delays in prosecuting the officials who were arrested on April 2, 2026.

The three — former Principal Secretary for Petroleum Mohamed Liban, former Kenya Pipeline Company (KPC) managing director Joe Sang, and former Energy and Petroleum Regulatory Authority (Epra) director-general Daniel Kiptoo — were released on cash bail after spending days in the police cells.

The DCI, whose investigations took detectives to Saudi Arabia, has yet to make its findings public.

‘Any ongoing administrative, disciplinary or criminal proceedings involving the said officers be concluded expeditiously but without prejudice to due process,’ the Senate committee on Energy says in a report.

‘Accordingly, the committee recommends that the Ministry of Energy and Petroleum, the Public Service Commission, the State Corporations Advisory Committee, the boards of Epra and KPC together with all relevant investigative agencies, submit a consolidated status report to the Senate within 60 days of adoption of this report detailing the progress, findings and outcomes of all investigations and disciplinary proceedings relating to the affected officials.’

DCI did not respond to requests for comment by the time of going to press despite promises.

Manipulated data

The Ministry of Energy said in April that the manipulated data was used to justify the emergency importation of fuel, despite standing contracts with Saudi Aramco Trading Fujairah, Abu Dhabi’s ADNOC Global Trading Ltd, and Emirates National Oil Company Singapore Ltd., arguing that the firms were all meeting their contractual obligations.

It alleged that the emergency shipment was overpriced, of substandard quality, and procured at rates significantly higher than those agreed under existing deals.

The DCI were expected to prepare charges against the three under the Anti-Corruption and Economic Crimes Act.

One Petroleum was tapped alongside Oryx Energies to supply the emergency stock of petrol in the wake of a decision by Kenya’s top security organ, the National Security Council Committee (NSCC), to import the backup cargoes of petrol.

At the time, a vessel carrying 85,000 metric tonnes of petrol belonging to Gulf Energies got stuck at the port of Jebel Ali in the wake of Iran’s closure of the Strait of Hormuz.

One Petroleum and Oryx Energies were on March 25, 2026 awarded the contracts to ship in 81.3 million litres each of petrol, in deals that would later trigger a fall-out and the resignations and arrests of three top officials in the country’s energy sector.

Hass Petroleum and E3 Energy also placed tenders for the emergency stocks.

Kenya sought Uganda’s aid when it had 124.39 million litres of petrol for both local and transit markets as of March 19.

The stock was to last the country for 16 days, meaning that Kenya faced a stock-out of petrol from April 4, 2026.

Uganda keeps part of its fuel in KPC reserves and this is what Kenya was seeking to tap.

Fuel crisis

Kenya then tapped One Petroleum and Oryx Energies to import 60,000 tonnes of petrol each, outside the government-to-government (G-to-G) deal, to avert the impending fuel crisis.

Within three days of the award of the deal, One Petroleum secured a vessel owned by BP and headed to Angola. The shipment did not conform to Kenyan fuel standards. One Petroleum then sought waivers on the specifications from the government.

The State directed One Petroleum to recall the product, a move that industry executives said was not feasible given that it had already been discharged into KPC’s system and mingled with other products.

The cancellation came hours before Oryx’s cargo had arrived at the port of Mombasa, with the firm later protesting the government’s decision to revoke the imports.

One Petroleum protested the cancellation, saying that it incurred substantial commercial losses tied to demurrage, customs warehouse rent and inability to liquidate the product at its cost, besides reputational damage.

The firm said that it had not initiated litigation against the State for the botched deal.

‘To date, no penalties or formal liabilities have been imposed on the company by the government arising from the transaction. One Petroleum has not made any claim against the government,’ One Petroleum said in documents tabled in the Senate in June.

Traffic congestion, demand for affordable transport and the rise of online shopping are turning Kenya’s motorcycle taxi business into a great opportunity.

For years, ride-hailing firms built their businesses around cars, offering passengers a convenient option to taxis and public transport. As traffic congestion worsens and consumers demand faster and cheaper ways to move around, boda bodas have become a crucial part of digital mobility.

Motorcycles can weave through congested streets, reach destinations that are difficult for vehicles to access and cost less to operate.

Days ago, Rwandan ride-hailing firm Yego entered Kenya’s motorcycle ride-hailing market. The firm says it has onboarded more than 4,000 electric boda bodas to serve Nairobi and plans to expand to other major towns.

“We plan to launch our services in Eldoret, Kisumu, Mombasa and other towns in two months,” said Yego Mobility Kenya Director Alok Srivastava.

One of the company’s key features is combining the convenience of traditional boda boda services with the pricing of an app-based ride.

One can use the Yego passenger app, a pairing feature to connect with a rider or hail a Yego rider.

In the latter case, the rider activates the trip using a digital meter on the company’s app. The fare is then calculated, based on the distance and time, eliminating price negotiations. Riders will also pick up passengers without having to remain parked while waiting for an app request.

Bolt has in recent days expanded parcel delivery service in Mombasa to include motorcycles. The ‘Bolt Send’, was launched in Mombasa using cars early this year. The Estonian company says the addition of motorbikes targets movement of small parcels.

This comes in handy for retailers, restaurants, pharmacies, offices and online sellers who do not have in-house fleets to dispatch goods to customers.

Bolt also targets businesses moving documents between offices or individuals sending items across town.

“For a small business, a delayed delivery can mean a delayed sale, a missed customer or an unnecessary operating cost,” Bolt’s Senior General Manager for Rides in East Africa, Dimmy Kanyankole, said.

“We are making it easier to move smaller parcels using infrastructure that people already know and use.”

Customers can request “Bolt Send” through the Bolt app, get an upfront price estimate and track their parcels in real time.

The expansion comes as Kenya’s e-commerce market continues to develop, creating a parallel opportunity for companies providing the logistics that underpin online shopping.

The pandemic accelerated the shift towards online purchases, with retailers like Quickmart, Carrefour and Naivas investing in mobile apps.

Online marketplaces, including Jiji, Kilimall and Jumia, have also helped establish delivery of items, while smaller sellers have increasingly turned to TikTok, WhatsApp and Instagram to sell goods and other items directly to consumers.

The widespread use of mobile money has made it easier for these social-commerce businesses to receive payments without maintaining physical shops.

While delivery costs are one of the biggest obstacles to the growth of online commerce, motorcycles offer an avenue for lowering that cost while shortening delivery times.

Companies like Uber, Bolt and Little have expanded beyond traditional passenger transport into parcel delivery, competing in a market where platforms such as Glovo have established motorcycle-based delivery networks.

Last month, the government introduced a 10-year Courier Hailing Service Provider permit for digital delivery platforms, separating the licensing requirements for app-based delivery services from those governing traditional courier operators.

The permit is over three times more expensive – a Sh100,000 licence fee and a similar annual operating fee – as the government seeks to grow revenue from the rapidly expanding sector.

More banks are racing to join the 100-plus branch club, even as customers increasingly embrace mobile and internet banking, signalling that physical outlets are taking on new roles beyond traditional cash and cheque transactions.

NCBA crossed the 100-branch threshold in Kenya in May 2025 with the opening of outlets at Tatu City and Nord Mall in Ruiru. Family Bank, which currently has 97 branches, has said it plans to open another in Upper Hill this week and cross the 100 mark before year-end.

The lender, which listed on the Nairobi Securities Exchange last June, is seeking to join KCB Bank Kenya, Equity Bank Kenya, Co-operative Bank of Kenya and NCBA, which now have more than 100 branches in the country.

‘We currently have 97 branches spread across 32 counties, but under our strategic plan, we want to increase that number. This year, we expect to cross the 100-branch mark. We need to be closer to our customers,’ said Nancy Njau, chief executive at Family Bank.

‘We continue to invest in digital banking where 92 percent of our transactions are happening, but we want to be physically present, particularly in areas with a large concentration of MSMEs, because that is our niche.

The push for larger branch networks comes amid rapid digital adoption, but banks say physical outlets remain important as urbanisation and the emergence of new commercial centres create fresh pockets of demand for financial services.

Besides Family Bank, Diamond Trust Bank (DTB) has 92 branches, up from 84 two years ago, and is among lenders still planning further expansion.

KCB, Equity and Co-op, which have the largest branch networks in Kenya at 223, 222 and 218, respectively, have also continued to expand. Co-op has recorded the biggest growth among the three, rising from 171 branches in 2024, while Equity has grown from 197 and KCB from 207.

The expansion is also evident among mid-sized lenders. I and M Bank has increased its Kenyan outlets from 41 to 73 under its iMara 3.0 strategy for 2024-2026, which targets deeper activity in the retail and small and medium enterprise (SME) segments.

Sidian Bank has grown its footprint from 44 branches in 2024 to 60 currently, joining I and M in the expansion journey. Both lenders are seeking a bigger share of the retail and SME market, with I and M targeting the 100-branch mark.

The expansion reflects a push to capture business from SMEs spread across established towns as well as fast-growing urban centres and trading hubs.

Towns such as Ruiru, Kikuyu, Thika, Karuri, Ongata Rongai, Juja and Kitengela have recorded population growth, encouraging banks, microfinance institutions and saccos to establish physical outlets.

As businesses expand beyond Nairobi and traditional urban centres, banks are positioning branches closer to entrepreneurs who need working capital, asset finance, trade finance and other services that often require more interaction with banking staff.

Kingdom Bank, one of the smaller lenders expanding its network, recently opened a branch in Naivasha, taking its physical count to 29 from 20 two years ago. The Co-op Bank subsidiary has been opening branches in areas with sustained commercial activity and demand for MSME-focused financial services.

‘Naivasha has strong economic activity across agriculture, hospitality, trade and industry. Our presence is intended to strengthen access to financing for businesses and individuals who are part of this growth and require responsive, practical banking support,’ said the lender.

Banks pursuing mass-market customers see a wider branch network giving them visibility and credibility in new markets while providing a physical point of contact for customers who are less comfortable with fully digital financial services.

The role of branches is also shifting from traditional transaction points to advisory and relationship-management centres. Lenders increasingly use their outlets to guide customers on investments, borrowing, insurance, wealth management and business financing.

The advisory role is particularly key for SMEs, where lending decisions depend on an understanding of the business, its cash flows and growth prospects.

Continued investment in branches, however, comes against accelerating digital adoption, which has made many routine banking transactions possible without visiting a branch.

Mobile money, banking apps, internet banking and agency banking have reduced the need for physical access for services such as low-value loan applications, cash transfers, payments, balance enquiries and bill settlement.

Banks are increasingly using digital platforms to handle high-volume, low-value transactions while reserving branches for more complex interactions, advisory services and customer acquisition.

The seeming contradiction between expanding branch networks and growing digital usage reflects a shift towards a multi-channel banking model rather than a return to brick-and-mortar banking.

Some banks, however, have moved in the opposite direction. Absa has reduced its network from 107 branches in 2024 to 91 this year, while SBM Bank Kenya has cut outlets from 41 to 33. Stanbic Bank has also edged down from 31 to 30.

But some lenders that closed branches in locations they deemed too close to each other are returning to selected markets with a more targeted approach.

SBM Bank last week launched its 34th branch in Nanyuki, targeting businesses such as conservancies, flower and horticulture exporters, SMEs and farmers.

‘Nanyuki is exactly the kind of market our strategy is built for. The region is a high-growth economy where relationship banking and digital convenience should work together. We are determined to bring banking closer to our customers at a time when our own numbers show the model is working,’ said Bhartesh Shah, CEO at SBM Bank Kenya.