British American Tobacco (BAT), a prominent player in the global tobacco industry, has recently come under scrutiny for alleged tax discrepancies in Kenya. A report by The Investigative Desk, published by the University of Bath’s Tobacco Control Research Group (TCRG) in collaboration with Tax Justice Network Africa, suggests that BAT Kenya (BATK) may have avoided or evaded up to $28 million in profit taxes during 2017 and 2018.
Key Findings from the Report:
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Revenue Discrepancies: An analysis of BATK’s financial reports from 2013 to 2019 revealed a $93 million discrepancy in revenue for 2017 and 2018. This gap could indicate potential tax avoidance or evasion.
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Unaccounted Cigarette Packs: The study identified millions of cigarette packs unaccounted for, leading to questions about lost tax revenue for Kenya.
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Lack of Explanation: BATK has not provided a plausible explanation for these discrepancies, raising concerns about the company’s financial practices in the region.
Expert Opinions:
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Leopoldo Parada, Reader in Tax Law at King’s College London: “In the absence of a convincing explanation, this looks like tax avoidance and potentially evasion.”
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Kennedy Waituika, Fraud and Audit Expert in Kenya: “This report should at least trigger a tax review of BAT. It should be a wake-up call for the KRA.”
BAT Kenya’s Response:
BAT Kenya has firmly rejected the allegations, stating: “BAT Kenya firmly rejects all the allegations made regarding the discrepancy between its published financial disclosures and data. The company pays all taxes in line with applicable laws.”
Implications for Kenya:
If these discrepancies are confirmed, it would indicate a major failure in regulatory enforcement. The Kenya Revenue Authority (KRA), already facing revenue collection challenges, is under pressure to investigate and take action against BAT.
Calls for Further Investigation:
Lawmakers and tax experts are urging the KRA to conduct a forensic audit of BATK’s financial records to determine whether the reported tax discrepancies constitute deliberate fraud.
The allegations against BAT Kenya highlight the need for greater scrutiny of multinational corporations operating in the country. As the controversy unfolds, the Kenyan public awaits a response from the government and the KRA on whether they will launch a full-scale investigation into BATK’s financial dealings.
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