The Kenya Revenue Authority has scaled up its efforts to meet the country’s cash inflows in its latest pursuit against tax cheats.
The Daily Nation reported that the authority had frozen accounts of an insurance firm belonging to the African Union.
“African Reinsurance Corporation (Africa Re) has protested the taxman’s move, terming it a violation of immunity granted to it in 1987 by founder members,” the local publication reported on Monday, September 23.
At the centre of the standoff is a Ksh12 billion tax bill that KRA claimed the company owes.
The dispute could sever diplomatic ties with AU member states which own the firm.
According to Daily Nation, KRA wrote to the organisation through the Ministry of Foreign Affairs.
The reinsurer then asked the ministry to intervene but no response was forthcoming.
“Africa Re holds that the deputy commissioner blundered by ruling that the taxman’s provisions are more powerful than treaties which gave the reinsurer immunity against taxes in Kenya,” Daily Nation published.
KRA has been on a crackdown on tax evasion that has resulted in the arrest of high profile individuals.
Commissioner-General James Mburu is on record stating that in the renewed fight against tax cheats, the authority was treating fraud as a criminal offence.
“We have tried to talk and settle disputes with the people we are investigating. But they just buy time and won’t comply. Then, we have to change the narrative,” he told reporters during his first wide-ranging media interview in August 2019.
