KRA, MPs dispute over Sh2.2 billion tax arrears persists

The Kenya Revenue Authority (KRA) is embroiled in a protracted multi-billion dispute with MPs over arrears owed to it by various National Government Constituencies Development Fund (NG-CDF) constituency committees. 

The taxman is demanding tax arrears of up to Sh2.2 billion from the committees, which has accumulated over the years.

But the lawmakers are adamant that the tax assessments were erroneous.

Mwingi Central MP Gideon Mulyungi, who revealed the tiff through a request for statement on the floor of the National Assembly, says efforts to engage the taxman and successfully arrive at an amicable solution have yielded no fruits.

“In 2021, NG-CDF board received a communication from the KRA demanding payment of tax arrears owing to certain constituencies. Most of the affected constituencies disputed the tax assessments and commenced a process of engaging KRA officers. The matter has, however, remained unresolved,” Mulyungi stated.

Subsequently, he submitted, a meeting of the NG-CDF Board and KRA was held on December 21, 2021 in which various issues were discussed, including tax accountability on labour-based contracts, collection of tax arrears, appointment of Fund Account Managers as VAT withholding agents, amongst others.

But despite numerous engagements between the NG-CDF board and KRA, the matters have remained pending.

“As of May 31, 2025, KRA is demanding tax arrears of up to Sh2.2 billion from the NG-CDF committees,” added Mulyungi.

It is based on these realities that the lawmaker is now seeking a clarification on the current status of arrears owed by each constituency, with a detailed breakdown of the amounts outstanding from Kimani Kuria, the chairperson of the Departmental Committee on Finance and National Planning.