Egerton University Accounts Frozen over Tax Row

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Egerton, Helios

Panic has gripped public universities after Kenya Revenue Authority (KRA) raided Egerton University over failure to remit Pay as You Earn and other statutory deductions.
KRA closed Egerton University bank accounts, throwing the institution operations into disarray.

A total of 10 universities have outstanding PAYE remittances amounting to Sh2.63 billion, an anomaly that exposes the staff to penalties from KRA because the workers are required to file tax returns annually.

They include Kenyatta University, the University of Nairobi, the Technical University of Kenya, Multimedia University of Kenya, Egerton University, Rongo University, Murang’a University of Technology, Maasai Mara University, Kaimosi Friends University College and Taita Taveta University.

KU is the biggest defaulter with Sh902.6million, followed by the University of Nairobi with Sh704.6 million while Technical University of Kenya rounds off the three worst performers with Sh634.3 million.

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The worst offenders in the remittance of pensions are the University of Nairobi at a staggering Sh1.35 billion; Jomo Kenyatta University of Agriculture and Technology with Sh1.1 billion and Technical University of Kenya at Sh946 million.

The KRA raid on Egerton University comes hot on the heels of a damning audit report revealing shocking details of how public universities are deducting billions of shillings from their employee’s salaries but not remitting the money to relevant agencies.

The universities are making deductions for National Hospital Insurance Fund (NHIF), bank and Sacco loans and savings, retirement savings and Pay As You Earn but not remitting them.

Remittance of statutory, loan and members’ deductions to Saccos and banks are mandatory employer obligations.

These deductions are made from employee’s pay and are expected to the remitted within the stipulated time.

However, the audit report indicates that some universities have failed to comply with the law on these remittances, meaning that they are either illegally holding or spending the money they deduct from their staff.

According to the report that was commissioned by the Ministry of Education, a total of six universities have outstanding remittances to banks and Saccos amounting to Sh481.3 million.

Out of this, Sh172.2 million had accumulated before the start of this financial year. That means Sh309 million has not been paid out to the relevant institutions in this financial year.

According to the report, five universities have outstanding remittances to NHIF amounting to Sh4.28 million while 26 other universities have outstanding pension remittances amounting to Sh4.58 billion.

Pension attracts interests and failure by universities to submit the deductions will mean that their workers will retire without getting their rightful benefits in their old age.

Moi University is the worst performing in this category, having de-faulted on remittances to Saccos and banks.

It is still holding on to Sh306.73 million of its workers’ money irregularly. It followed by Egerton University, which has not remitted Sh187.95 million.

In third place in the list of worst performers is Technical University of Kenya (TUK), which is yet to submit Sh178.9 million. The University of Nairobi is fourth with Sh50.76 million, followed by Kenyatta University (Sh39.3 million), Kisii University (Sh24.17 million). Murang’a University, by contrast, is yet to remit Sh169,783 only.

Universities that have defaulted in remittance of NHIF deductions are; Technical University of Kenya (Sh3.16 million), Egerton University (Sh695,600), Maasai Mara University (Sh215,400), Multimedia University of Kenya (Sh191,400) and Kaimosi Friends University College with only Sh19,200.

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