By Eddah Waithaka
National Taxpayers Association (NTA) and a coalition of tobacco control advocates and taxpayer watchdogs has called for urgent action following revelations of a potential $28 million tax discrepancy involving British American Tobacco Kenya (BAT Kenya).
The allegations stem from a report published by the University of Bath’s Tobacco Control Research Group in collaboration with The Investigative Desk and Tax Justice Network Africa (TJNA).
The report, released on February 12, 2025, uncovered significant inconsistencies in BAT Kenya’s financial disclosures, suggesting possible tax evasion and illicit financial flows.
Specifically, the investigation revealed that BAT Kenya failed to report $94 million in cigarette sales between 2018 and 2021, resulting in an estimated KShs 3.6 billion in lost profit taxes.
Speaking at a press briefing in Nairobi, Irene Otieno, National Coordinator of the National Taxpayers Association (NTA), expressed shock at the findings. “BAT Kenya has received numerous awards as a leading taxpayer in Kenya. Yet, this report points to a glaring discrepancy in their financial reporting. How can we continue to view this corporate entity as a value to our system when such irregularities exist?” she asked.
Otieno emphasized the broader implications of the alleged tax evasion, particularly in light of Kenya’s struggling health sector.
“The funds lost through these discrepancies could address critical shortfalls in our health budget,” she said.
Rachel Katanya Devotsu, a senior tobacco control advisor with Development Gateway, echoed these sentiments, calling for a forensic audit of BAT Kenya’s financial records. “We cannot take BAT’s statements at face value. This report indicates deliberate attempts to obscure their financial activities. We demand transparency and accountability,” she said.
Devotsu also highlighted concerns about the Tobacco Control Fund, which draws 2.75% of BAT Kenya’s profits. “If $3.6 billion was not declared, then 2.75% of that amount should have gone to the fund. Yet, we have no clarity on how much has been contributed over the years. This lack of transparency is unacceptable,” she added.
The Kenya Revenue Authority (KRA) has acknowledged the report and pledged to investigate the allegations.
In a statement, KRA affirmed its commitment to upholding the integrity of Kenya’s tax system.
“We take these allegations seriously and are currently reviewing the findings. Any evidence of tax avoidance or evasion will be addressed with urgency,” the statement read.
However, advocates remain skeptical of KRA’s response. “KRA has been quick to burden individual taxpayers but seems reluctant to hold corporate entities accountable. This double standard undermines public trust,” Otieno said.
BAT Kenya has vehemently denied the allegations, describing the report as “based on conjecture and erroneous assumptions.”
In a statement, Managing Director Crispin Achola said, “BAT Kenya unequivocally rejects these claims. Our external auditors and regulators have audited our financial disclosures, ensuring compliance with all applicable regulations.”
The coalition, however, remains unconvinced. “BAT’s history of aggressive tax planning and evasion in other countries raises red flags. Kenya cannot afford to lose critical revenue to such practices,” Otieno stated.
The NTA and its partners are now calling for immediate action, including a forensic audit of BAT Kenya’s financial records and a review of contributions to the Tobacco Control Fund.
They also urge the government to prioritize public health over corporate interests. “This is not just about tax evasion; it’s about the lives of Kenyans. We must not let corporations profit at the expense of our health and economic well-being,” Otieno concluded.
As the investigation unfolds, the coalition vows to continue advocating for tax justice and accountability, ensuring that multinational corporations operating in Kenya contribute their fair share to the nation’s development.
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