KRA Turns to Car Registration, Title Deeds to Track Businessmen Who File Nil Returns

In Summary:

• KRA is shifting its focus to the informal sector by targeting businesses and individuals with a turnover of Ksh200 million and below. The new Department of Micro & Small Taxpayers, will use asset data to curb underdeclarations and boost revenue collection.
• Buyers of a Ksh105m house in the KUSCCO Kajiado project pay just a Ksh5,000 deposit. 
• MPs on the education committee are urging the government to allow schools to charge extra levies due to a significant capitation shortfall. The Ministry of Education requested Ksh74 billion, but only Ksh54 billion was released—forcing schools to seek additional funds amid falling per-learner allocations.
• The Treasury is under scrutiny after a mysterious Ksh17.23 billion domestic debt incurred before 1997 remains unpaid. The CRA demands clarity on long-standing obligations, as domestic debt has surged by Ksh1.6 trillion since President Ruto took office.
• Counties are calling on the National Treasury to allocate Ksh547 billion in the next financial year as an equitable revenue share. 
• Stima Sacco is set to diversify its revenue streams by converting its existing insurance agency into a full-fledged insurance brokerage subsidiary. This move will enable the sacco to earn higher income from brokerage fees and invest in government securities and unquoted equities to enhance its savings and credit solutions.
• Many retirees in Kenya are still waiting for their pension benefits as the Retirement Benefits Authority has yet to disburse Ksh56 billion in pending claims. With some claimants waiting up to 25 years, the RBA is considering deducting pension contributions directly from the source to address mismanagement.
• Plans to extend the Standard Gauge Railway from Naivasha to Kisumu are advancing. Kenya Railways has launched an Environmental and Social Impact Assessment for Phase 2B along a 262-km route—including a new lake port in Kisumu—to boost regional connectivity, create jobs, and reduce transportation costs.
• A transition committee to the Social Health Authority disclosed that the defunct NHIF owes Ksh25.8 billion to hospitals, insurers, and creditors, with additional contingent liabilities of Ksh16.1 billion. 
• Kenya’s Treasury raised Ksh35.2 billion from the domestic market by reopening a 25-year bond, surpassing its Ksh25 billion target. With a 13.4% coupon rate and maturing in May 2043, the bond will refinance maturing debt and fund development initiatives amid strong investor confidence.
  

In a report by Citizen, the Kenya Revenue Authority (KRA) is shifting its focus to the informal sector by targeting businesses and individuals with a turnover of Ksh200 million and below, a move driven by the fact that although there are about 20 million PIN holders in this category, they only contribute 14% to domestic taxes compared to 86% from larger entities. The newly-formed Department of Micro & Small Taxpayers, led by Acting Commissioner George Obell, will deploy strategies to monitor transactions and curb underdeclarations, including using data on assets such as land and vehicles. Additionally, the taxman plans to focus on sectors like government suppliers, transport, ICT, and agriculture, while incentivising consumers to seek proper fiscal invoices to increase transparency and boost revenue collection from the informal economy. 

In a report by The Standard, the Kenya Union of Savings and Credit Cooperatives (KUSCCO) Kajiado project is under intense scrutiny after reports emerged that buyers of a house priced at Ksh105 million are only required to pay a Ksh5,000 deposit. Critics argue that the unusually low deposit may be indicative of deeper financial irregularities and mismanagement within the project. Industry experts warn that such minimal initial payments could leave buyers exposed to higher risks of default and potential losses, while also calling into question the project's overall credibility and pricing strategy. The report suggests that the low deposit requirement might be a tactic to attract unwary investors, masking underlying issues in the project's financial structure and execution, and calls for stricter regulatory oversight to safeguard consumer interests in the real estate market. 

In a report by the Business Daily, the Treasury is under scrutiny after it was revealed that a mysterious Ksh17.23 billion domestic debt—incurred before 1997—remains unpaid, prompting the Commission on Revenue Allocation (CRA) to demand clarity on the creditors and reasons for non-payment. The debt anomaly was highlighted during a Senate Finance and Budget Committee meeting, where CRA vice-chairperson Koitamet Olekina stressed that such longstanding obligations must be explained, especially as Kenya’s domestic debt now stands at Ksh5.93 trillion, having grown by Ksh1.6 trillion since President Ruto took office. The issue also ties into a Ksh73 billion discrepancy in the budget books, attributed to the inclusion of Social Health Insurance Fund expenses that were not reflected in the fiscal framework, raising concerns over fiscal management and transparency. 

Counties are urging the National Treasury to allocate Ksh547 billion in the next financial year as an equitable revenue share to enable devolved units to effectively deliver services and meet their constitutional mandates. According to the People Daily, Governors contend that this amount—comprising the equitable share for all 47 counties, an Equalisation Fund for historically underdeveloped regions, and a County Additional Allocation—must cover non-discretionary financial obligations that include Ksh39 billion for new medical equipment, Ksh6.3 billion for annual wage increments, Ksh4.05 billion for housing levy deductions, and Ksh6 billion for enhanced NSSF contributions. While the Treasury had proposed Ksh405 billion and the Commission on Revenue Allocation recommended Ksh417 billion for the equitable share, governors argue that the shortfall, especially the missing Ksh73.78 billion needed to meet urgent expenses, is crippling their ability to run effective administrations, prompting calls for Parliament to pass the County Additional Allocation Bill without the Roads Maintenance Levy Fund component.

Stima Sacco is set to diversify its revenue streams by converting its existing insurance agency into a fully-fledged insurance brokerage subsidiary, a move approved by its shareholders at the annual general meeting. According to the Business Daily, Chief Executive Gamaliel Hassan explained that this conversion will allow the sacco to earn higher income from brokerage fees by acting as an intermediary between clients and insurance providers, rather than merely receiving agency commissions. The new brokerage, which will be 100% owned by Stima Sacco, is part of a broader strategy that also includes investments in government securities and unquoted equities, aimed at bolstering the sacco’s core mandate of providing savings and credit solutions to its members.

Many retirees in Kenya are still waiting for their pension benefits as the Retirement Benefits Authority (RBA) has yet to disburse Ksh56 billion in pending claims, with state corporations holding 19% of this overdue cash. Counties, public universities, and agencies in the sugar and water sectors have also failed to remit required contributions, leading to daily complaints from pensioners and calls from the National Assembly Finance and National Planning Committee for urgent government intervention. According to the People Daily, the RBA is now considering deducting pension contributions directly from the source to address the mismanagement, as many institutions receive disbursements only to allocate the funds elsewhere. With some claimants waiting up to 25 years for their dues, the situation has been described as “theft,” further exacerbating the financial hardships faced by Kenya’s elderly.

Plans to extend the Standard Gauge Railway (SGR) from Naivasha to Kisumu are advancing as Kenya Railways has launched an Environmental and Social Impact Assessment (ESIA) for Phase 2B of the project. A consultancy firm has been engaged to evaluate potential environmental and social impacts along the 262-kilometer route that will traverse Narok, Bomet, Kericho, and Kisumu counties, while developing mitigation measures in consultation with Project Affected Persons (PAPs) as reported by the People Daily.

In a report by the Business Daily, a transition committee to the Social Health Authority (SHA) disclosed that the defunct NHIF owes a combined Ksh25.8 billion to hospitals, insurance companies, trade creditors, and the Kenya Revenue Authority as of December 31, 2023. The liabilities include Ksh15.87 billion in hospital-related claims (with 2.7 million unverified claims), Ksh5.6 billion in insurance claims, Ksh3.6 billion in deferred income, plus additional amounts for trade creditors and tax payables. The report also highlights contingent liabilities of Ksh16.1 billion arising from court cases, legal fees, tax arrears, and overseas payment guarantees. In response, President William Ruto announced measures to settle outstanding NHIF debts by releasing an additional Ksh2.5 billion, followed by another Ksh3.7 billion to cover long-standing debts to medical institutions, prioritizing hospitals with claims of Ksh10 million or less, while claims exceeding that threshold will undergo a 90-day audit before payment plans are finalized.

In a report by the People Daily, Kenya’s Treasury raised Ksh35.2 billion from the domestic market. The bond, which carries a 13.4% coupon rate and matures in May 2043, attracted institutional investors such as pension funds and insurers, positioning it as a safe haven amid global market turbulence. This was through the reopening of a 25-year bond—exceeding its Ksh25 billion target by achieving a performance rate of 188%—to refinance maturing debt and fund development initiatives. Of the total, Ksh27.69 billion will be used to refinance existing obligations, while Ksh7.55 billion is earmarked for new borrowing. 

In other news by the People Daily, MPs on the education committee have urged the government to allow schools to charge extra levies due to a significant capitation shortfall. The Ministry of Education requested Ksh74 billion, but the National Treasury released only Ksh54 billion—leaving schools with about Ksh17,000 per learner compared to the ideal Ksh22,224. Lawmakers are urging Education Principal Secretary Belio Kipsang to clarify the actual funds disbursed, as the funding gaps have forced school heads to send children home or seek additional income to cover operational costs. The issue also extends to junior secondary and free primary education, with deficits of Ksh16 billion and Ksh1.2 billion respectively.