British American Tobacco (BAT) Kenya might soon find itself in a hot soup, if the allegations of tax evasion practice amounting to Sh$28 million (Sh3.6 billion) for the period between 2017 and 2018 and inconsistencies in its books of accounts where some Sh9.6 billion are in question, are found to be true.

This comes after Kenya Revenue Authority (KRA) Commissioner for Domestic Taxes department, through a statement to newsrooms stated that they are currently reviewing the findings of the report before taking an appropriate action.

“KRA takes these allegations seriously and is committed to upholding the integrity of Kenya’s tax system. We are currently reviewing the findings of the report and will take appropriate action. Our mandate is to ensure that all corporations operating within Kenya comply fully with tax regulations, and any evidence of tax avoidance or evasion will be addressed with the utmost urgency,” the commissioner said.

BAT Managing Director Crispin Achola on Tuesday refuted the claims, saying the company complies with all the guiding principles and that the figures issued in the report are inaccurate and misleading.

He said their books are usually audited by both the Company’s external auditor and the regulator, including the 2017 and 2018, fiscal years in question.

He however, acknowledged that in June 2024, BAT Kenya indeed received a request from The Investigative Desk for comments regarding the issues covered in the report but their queries did not reflect the methodology used to analyse BAT data.

“BAT Kenya unequivocally and firmly rejects the allegations made, including those regarding the discrepancy between the company’s published financial disclosures and data referred to in the report. The company publishes its financial disclosures in its Annual Reports and audited Financial Statements in line with the applicable local regulations and international reporting standards,” he said.

Achola accused the journalists of publishing overstated figures, stating that it is currently weighing its options in regards to the impact of the allegations on the company.

“Worryingly, in efforts to reconstruct BAT Kenya’s numbers for their analysis, the authors of the report proceeded to apply erroneous assumptions in their calculation of the company’s revenues, profit, and tax due for cigarette sales. This includes the use of incorrect prices, a disregard of applicable trade margins and costs deductible,” he added.

In regards to farmers exploitation, relevant bodies such as the Central Organisation of Trade Unions (COTU) and the Ministry of Labour and Social Protection are yet to comment on the issue. According to the report, the firm also exploits its farmers by slashing upto 60 per cent of the farmers salaries to cater for the tobacco production inputs that it provides them with.