http://in2eastafrica.net/2015/12/10/taxman-invites-eacc-to-investigate-staff-over-bat-bribery-scandal/
THE TAXMAN HAS INVITED THE ANTI-CORRUPTION WATCHDOG TO INVESTIGATE ALLEGATIONS THAT ITS STAFF RECEIVED BRIBES FROM CIGARETTE MAKER BRITISH AMERICAN TOBACCO (BAT) TO SPY ON ITS KENYAN RIVAL FIRM.
The British Broadcasting Corporation (BBC) in its investigative show Panorama reported that BAT executives paid bribes to Kenya Revenue Authority (KRA) officials to spy on Mastermind Tobacco — the manufacturer of Supermatch cigarettes — and hand over tax files.
The expose shows that the KRA officials were also paid to make numerous tax demands from Mastermind, a strategy whose aim was to intimidate and damage the reputation of the homegrown Kenyan firm.
“We have taken action to seek relevant details in support including the nature of information allegedly divulged, recordings if any of the bribery incidents, individuals involved on both sides (KRA/BAT), amounts paid/received and the evidence to support bribe taking,” KRA Commissioner General John Njiraini said in a statement released yesterday.
BAT is UK’s fifth-biggest company and last year it sold 667 billion cigarettes and made Sh693 billion (£4.5 billion) profit. It has big operations in Kenya.
The expose also accused BAT of bribing senior politicians and top civil servants in East Africa. One of the top politicians named in the scandal is Bungoma Senator Moses Wetang’ula, who has since denied the allegations.
The programme, dubbed ‘The Secret Bribes of Big Tobacc’, also names Julie Adell-Owino, a Kenyan lobbyist who allegedly arranged bribes totalling Sh2.6 million ($26,000) for three public officials in Rwanda, Burundi and the Comoros Islands. She is a former head of corporate and regulatory affairs at BAT.
Mr Njiraini maintained that KRA requires staff to maintain strict confidentiality as provided by law, in the handling of tax matters of any taxpayer as the grounds on which he would not comment on the substance of the allegations.
Njiraini said that he has declined to publicly comment on the agency’s tax enforcement actions against Mastermind Tobacco (MTK), for ‘confidentiality’ reasons.
Instead, the taxman says he has asked investigating agencies to look into the allegations with the view of taking action.
“We have invited other investigative agencies including the EACC to partner with us in unearthing any unethical practices, and wish to encourage those making the allegations to share them with ourselves and with the EACC at the earliest point,” Njiraini said.
The taxman has a long-running battle with Mastermind Tobacco over tax issues and the allegations give a new dimension to what could have motivated some of its staff to pursue the firm so furiously.
“We paid the KRA guy, the right KRA guy a shed load of money. He issued all the tax demands. I mean we have tax demands now,” says Paul Hopkins in a leaked recorded telephone conversation with then BAT Kenya boss Gary Fagan. Mr Hopkins worked for BAT Kenya for 13 years and was the man tasked with arranging and delivering bribes to tax officials. He has now turned into a whistleblower.
By Paul Wafula, The Standard