NAIROBI, Kenya: A damning investigative report alleges that BAT Kenya may have underreported its revenue, leading to a significant shortfall in taxes paid to the Kenya Revenue Authority (KRA). The report, released in February 2025 by The Investigative Desk in collaboration with the University of Bath’s Tobacco Control Research Group (TCRG) and Tax Justice Network Africa, raises serious questions about corporate accountability and tax compliance in Kenya.
The investigation found a staggering $93 million (approximately KES 9.6 billion) discrepancy between the revenue figures reported by BAT Kenya and the estimates derived from government records, internal production data, and cigarette consumption patterns. This discrepancy, if proven accurate, suggests that the company may have failed to remit an estimated $28 million (KES 3.6 billion) in profit taxes over a two-year period between 2017 and 2018.
Alleged Revenue Gaps and Tax Shortfalls
The findings are based on an extensive analysis of financial disclosures, production data submitted to KRA, and industry-wide figures on cigarette pricing and consumption. Investigators discovered that millions of cigarette packs were unaccounted for in BAT Kenya’s revenue reports, fueling suspicions that the company either failed to declare full earnings or engaged in transfer pricing strategies to minimize tax liabilities.
According to the report, BAT Kenya’s official financial records for the period showed revenue figures that were significantly lower than expected based on industry benchmarks. The report argues that if all cigarette sales were properly recorded at market prices, BAT Kenya’s reported revenue and profits should have been considerably higher than what was officially disclosed.
“The data paints a picture of a systematic underreporting of revenue, which would result in tax losses for the Kenyan government,” said Dr. Anna Gilmore, the Director of TCRG at the University of Bath. “Given BAT’s dominant market position in Kenya, the potential financial implications are enormous.”
BAT Kenya’s Strong Denial
BAT Kenya has vehemently denied the allegations, dismissing the report’s findings as flawed and misleading. Crispin Achola, BAT Kenya’s Managing Director, rejected the claims, asserting that the company complies with all tax regulations and that its financial disclosures undergo rigorous external audits.
“The report contains numerous misrepresentations and inaccuracies,” Achola said in a statement. “BAT Kenya is a publicly listed company on the Nairobi Securities Exchange, meaning our financials are independently audited and publicly available. We operate with full transparency and integrity, in compliance with Kenyan laws and international accounting standards.”
Achola further criticized the methodology used in the investigation, arguing that the assumptions underlying the revenue estimates were flawed. He pointed out that fluctuations in production, market prices, and distribution logistics were not properly accounted for in the analysis.
“We have consistently met our tax obligations, and any suggestion that we have evaded tax payments is completely false and unfounded,” Achola said.
KRA Responds: Investigation Underway
Following the report’s release, the Kenya Revenue Authority (KRA) acknowledged the findings and confirmed that it was conducting an internal review to determine the accuracy of the claims. KRA officials stated that while they had not yet found conclusive evidence of tax evasion, they were taking the matter seriously.
“KRA is committed to ensuring that all businesses, including multinational corporations, pay their fair share of taxes,” said KRA Commissioner General Humphrey Wattanga. “We appreciate independent research efforts that promote transparency and accountability. If we find any discrepancies after reviewing the report, appropriate legal and administrative measures will be taken.”
KRA has also assured the public that it would closely monitor BAT Kenya’s tax filings moving forward and enhance oversight measures on large corporate taxpayers.
National Taxpayers Association Calls for Accountability
The National Taxpayers Association (NTA) has also weighed in on the controversy, urging authorities to take decisive action against corporate tax evasion. Irene Otieno, NTA’s National Coordinator, emphasized the broader implications of tax avoidance on Kenya’s economy.
“NTA strongly calls on KRA to conduct a rigorous investigation to ensure that Kenya does not lose critical revenue through IFFs (Illicit Financial Flows) and tax evasion. Corporate entities must be held accountable for their tax obligations, as lost revenue directly impacts essential public services and national development,” Otieno said.
“NTA remains committed to championing tax justice, advocating for policy reforms, and ensuring that multinational corporations operating in Kenya contribute their fair share of taxes. We call on all relevant authorities to take decisive action to safeguard Kenya’s economic interests and prevent illicit financial flows that undermine the country’s growth.”
Broader Implications for Kenya’s Tax System
The allegations against BAT Kenya have reignited debate over corporate tax avoidance in Kenya and the broader East African region. Analysts warn that multinational corporations often exploit legal loopholes and use sophisticated tax structures to minimize their tax liabilities, depriving governments of much-needed revenue for public services.
John Njiraini, a tax expert and former KRA Commissioner General, noted that such cases highlight weaknesses in Kenya’s corporate tax enforcement mechanisms.
“Multinationals, especially those in industries like tobacco and extractives, often use transfer pricing and profit shifting techniques to reduce their tax burdens,” Njiraini said. “Stronger enforcement, transparency measures, and international cooperation are needed to curb such practices.”
Kenya has been grappling with tax avoidance by major corporations, and the BAT Kenya case underscores the urgent need for reforms. Experts argue that the country should adopt stricter regulations on multinational corporations, including mandatory country-by-country reporting of financials and automatic exchange of tax information with other jurisdictions.
What Happens Next?
With KRA’s ongoing review and mounting public scrutiny, BAT Kenya faces intensified pressure to provide a full accounting of its financial records. Tax justice advocates are calling for an independent audit of the company’s tax filings over the past decade to determine if similar discrepancies exist beyond the 2017-2018 period examined in the report.
Meanwhile, civil society organizations, including Tax Justice Network Africa, are pushing for increased transparency in corporate tax reporting and urging the Kenyan government to close loopholes that allow profit shifting and tax avoidance by multinational corporations.
Conclusion
The “Missing Millions” report has sent shockwaves through Kenya’s corporate sector, raising urgent questions about tax compliance and corporate responsibility. While BAT Kenya maintains its innocence, the ongoing KRA investigation and heightened public interest suggest that this case is far from over.
As scrutiny intensifies, the outcome of this case could have far-reaching consequences for tax enforcement in Kenya and set a precedent for how multinational corporations are held accountable in the country. If the allegations are proven true, BAT Kenya could face substantial financial penalties and reputational damage, further fueling the debate over corporate tax practices in Africa.
For now, all eyes remain on KRA’s next move as Kenya seeks to recover potential lost revenue and strengthen its tax laws to prevent similar cases in the future.
