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The Kenya Revenue Authority (KRA) has launched an investigation into Kakuzi Plc, an agricultural cultivation and manufacturing company linked to Kenyan media mogul John Kimani, over alleged transfer pricing claims, i.e., paying less tax as a result of cross-border transactions.
The allegation comes amid a new tax investigation into whether Kakuzi is paying less tax as a result of cross-border transactions with Camellia Plc, a UK-based multinational agricultural conglomerate that owns the majority of its shares.
Rispah Simiyu, KRA’s commissioner for domestic taxes, stated that the Kenyan tax authority is conducting internal reviews on transfer pricing in a tax evasion claim involving the agricultural firm and its parent company, Camellia, the world’s largest privately owned tea producer.
“KRA wishes to state that it is currently undertaking internal reviews on transfer pricing and other tax practices of Kakuzi PLC with a view of commencing an in-depth audit work,” Simiyu said. “This will enable KRA to establish transfer pricing allegations and the company’s dealings.”
Companies are required by the Organization for Economic Cooperation and Development (OECD) to price transactions as if they occurred between third parties and report to tax authorities how the price was determined and recognized.
Kakuzi is an agricultural cultivation and manufacturing company that trades on the Nairobi Stock Exchange. Avocados, blueberries, macadamia nuts, tea, cattle, and commercial forestry are among the products grown, processed, and sold by the corporation.
Kimani, a member of Kakuzi’s board of directors, owns 32.3 percent of the company, or 6,330,699 shares.
As of press time, the market value of his stake in the Kenyan firm was Ksh2.33 billion ($19.5 million).
