Kisumu varsity sues KRA for freezing its bank accounts
The bank accounts were frozen on November 20 last year, rendering the institution unable to pay salaries of its 278 employees and settle debts owed to various service providers. The KRA, the university says, opened the banks accounts for a while but last month wrote letters to the banks to credit the institution’s accounts with tax arrears.
Great Lakes University of Kisumu students outside the institution in March last year. FILE PHOTO | NMG
The Great Lakes University of Kisumu has sued the Kenya Revenue Authority (KRA) for closing its bank accounts over Sh95 million tax arrears. The Kisumu-based private university’s vice-chancellor, Atieno Amadi, says the bank accounts were frozen on November 20 last year, rendering the institution unable to pay salaries of its 278 employees and settle debts owed to various service providers.“Employees have gone without salaries since January. In all these months employees, including myself, have had to go home with half of their salaries because we can’t access our accounts and we have huge debts,” says Prof Amadi.The debts include over Sh200 million owed to Chase Bank.
The fate of over 1,000 students studying at the institution in limbo after various activities were affected while the graduation for those who have completed their programmes has been postponed twice due to lack of finances, she says.The KRA, the university says, opened the banks accounts for a while but last month wrote letters to the banks to credit the institution’s accounts with tax arrears.Prof Amadi says the university received copies of letters dated June 21 on June 25, 2018.In a letter written on the same day the accounts were closed, the university asked the KRA to agree to the payment plan of Sh1 million per month until such time the university would be able to settle the tax arrears in lump sum.The case is set to be mentioned on July 30 at the Kisumu Law Courts.The arrears had risen from Sh35 million in 2014 to Sh75 million as at June 2016. After an audit, the tax man revealed that the university owed them Sh117, 727, 990 as tax arrears.The amount comprised Sh116 million and Sh926, 906 as Pay as You Earn (PAYE) and withholding tax respectively.The university management and the Senate led by the vice-chancellor disclosed the problems facing the institution at a press briefing yesterday where they also reacted accusations of mismanagement levelled against them.Prof Amadi had been accused of abuse of office after it emerged she was hiring out her car and was being paid for the same at Sh3, 000 per day. She is also said to have gone with the same vehicle for a trip to Tanzania for 10 days at a cost of Sh14, 000 per day.