National Tax Association Accuses BAT Kenya Of Tax Discrepancy

By ABN Staff March 19, 2025

National Tax Association Accuses BAT Kenya Of Tax Discrepancy

The National Taxpayers Association (NTA) is demanding accountability as British American Tobacco Kenya (BAT Kenya) refutes allegations of a $28 million tax discrepancy.

In collaboration with key stakeholders, NTA is calling for full transparency following reports of a potential $326 million tax discrepancy involving BAT Kenya for the 2017/2018 fiscal year.

An investigative report, published by the University of Bath’s Tobacco Control Research Group in partnership with The Investigative Desk and Tax Justice Network Africa (TJNA), uncovered inconsistencies in BAT Kenya’s financial statements, raising concerns over potential tax evasion and illicit financial flows (IFFs).

The National Taxpayers Association (NTA) is demanding accountability as British American Tobacco Kenya (BAT Kenya) refutes allegations of a $28 million tax discrepancy.

The investigation specifically found that BAT Kenya underreported $94 million in cigarette sales, leading to an estimated loss of KShs 3.6 billion in profit taxes between 2016 and 2021. The report suggests that deliberate tax evasion was most prominent between 2017 and 2018—equivalent to the budget for transformer installations across Kenya during the 2017/2018 fiscal year.

These revelations emerge amid ongoing tax protests in Kenya, where citizens have voiced frustration over increasing tax burdens.

BAT Kenya Denies Allegations

BAT Kenya has firmly rejected the accusations, asserting that the report is based on flawed assumptions and misrepresentations of its financial records. The company maintains that it complies with all financial disclosure regulations and international reporting standards.

Addressing the issue, BAT Kenya Managing Director Crispin Achola stated, “We unequivocally reject the allegations, including claims regarding discrepancies in our financial disclosures.”

KRA Responds to the Allegations

In response, the Kenya Revenue Authority (KRA) issued a statement acknowledging the seriousness of the claims and confirming an ongoing review of the report’s findings.

“Our mandate is to ensure all corporations comply with tax regulations. Any evidence of tax evasion or avoidance will be addressed with urgency,” the statement read.

NTA Pushes for Greater Accountability

Speaking at a stakeholder meeting, NTA National Coordinator Irene Otieno urged both BAT Kenya and KRA to ensure full transparency.

“NTA calls for a thorough investigation to prevent Kenya from losing critical revenue to illicit financial flows and tax evasion. Corporations must be held accountable, as lost tax revenue directly affects public services and national development,” she stated.

She further emphasized NTA’s commitment to tax justice, policy reforms, and ensuring multinational corporations pay their fair share of taxes.

National Tax Association Accuses BAT Kenya Of Tax Discrepancy

Key Findings from the Report

The report highlights the following major concerns:

Complex Corporate Structure – BAT Kenya operates through a web of subsidiaries, making it difficult to track its financial activities.
Tax Evasion & Avoidance – BAT has allegedly engaged in aggressive tax planning, using internal loans, royalty payments, and transfer pricing to minimize tax liabilities.
Discrepancies in Financial Reporting – The company reportedly understated cigarette sales, raising suspicions of illicit trade practices.
Public Health & Economic Impact – Tobacco-related illnesses cost Kenya KShs 47 billion annually, far exceeding BAT Kenya’s reported profits.
Weak Regulatory Oversight – Despite BAT’s tax-related cases in other countries, KRA has yet to take decisive action against the company.

NTA’s Recommendations

In light of these findings, NTA and its partners are calling for:

A comprehensive tax review of BAT Kenya.
Increased taxation on tobacco and nicotine products, in line with WHO Framework Convention on Tobacco Control (WHO FCTC) guidelines.

NTA remains committed to working with stakeholders to ensure corporate tax compliance, protect Kenya’s economy, and prevent illicit financial flows.