Kenyatta University bank accounts have been frozen by the Kenya Revenue Authority over unpaid tax arrears amounting to two billion shillings according to a report by Sunday Nation.
The taxman took action after the management of the university failed to submit their dues deductions as per the requirements. They did not comply with the requirements of the taxman.
Kenyatta University has been experiencing a financial crisis. Other than the amount which the University owe KRA, the workers and the suppliers are still owed by the institution.
The University has a debt amounting to five point six billion shillings. Workers were paid through cheques that bounced at the bank.
Earlier on, at the onset of the crisis, the University had borrowed short-termed loans to help in carrying out their normal operations when they experienced a deficit. The loan didn’t solve the problem completely but instead, it has lead to a bigger crisis the auditor general revealed.
Nancy Gathungu (Auditor-General) further added that the University is working under financial constraints and is depending on expensive loans which will lead to worse scenarios in the long run if not checked.
The accumulated surplus of the university was reduced from five point eight billion to four point five billion in 2019 due to the financial deficit recorded by the University in 2020 as revealed by the Auditor General.
The liabilities that were valued at six point three eight billion as of 2020, June (end of financial year) is currently higher compared to the assets of the instruction whose current value is Kshs one point five eight (1.58) which is way below the expected value.
The auditor general further added that the institution is unable to remit pensions and taxes of up 3.67 billion shillings, 8.1 million audit fee and other deductions valued at Ksh 342.9 million to the respective beneficiaries.