The Kenya Revenue Authority (KRA) has initiated a process to recover KSh 623.39 million in alleged unpaid taxes from former Nairobi Governor Mike Sonko through First Community Bank. In a notice dated October 12, 2026, the tax authority appointed First Community Bank as an agent for tax recovery, directing the lender to surrender any funds it holds on behalf of Sonko or any money payable to him towards settling the outstanding tax liability. The move is part of KRA’s efforts to collect the alleged tax arrears, which relate to the period between January 2015 and December 2019.
Breakdown of Sonko’s Alleged Tax Arrears
According to the notice, the total amount KRA is seeking stands at KSh 623,389,105, comprising principal tax, penalties and accrued interest. The amount is broken down as follows:
- Principal tax: KSh 308.92 million
- Penalties: KSh 15.76 million
- Interest: KSh 298.72 million
The interest accounts for a significant portion of the claimed liability, alongside the principal tax and penalties accumulated over the period under review. KRA has directed the bank to establish whether it holds any money belonging to Sonko and remit the applicable funds towards clearing the alleged debt.
KRA Cites Tax Procedures Act
In issuing the notice, KRA invoked Section 42 of the Tax Procedures Act, 2015, which empowers the authority to appoint a third party as an agent to recover outstanding taxes.Under the provision, a bank or another entity holding money for a taxpayer, or owing money to the taxpayer, may be required to remit the funds to KRA to settle the tax liability. The authority also instructed First Community Bank to submit a return detailing any money it holds on Sonko’s behalf. The notice places the responsibility on the bank to comply with the recovery instructions in accordance with the law.
Bank Warned Against Non-Compliance
KRA cautioned that First Community Bank could become personally liable for the amount specified in the notice if it fails to comply without reasonable cause. The authority further clarified that making a partial payment would not automatically cancel the notice. Instead, it would remain in effect until the full amount sought had been recovered.
In the notice, KRA referred to Section 42(13) of the Tax Procedures Act, 2015, which provides for personal liability where an appointed agent fails to comply with a tax recovery notice without reasonable cause. The provision is intended to ensure that third parties appointed to facilitate tax recovery meet their legal obligations.
KRA Steps Up Tax Recovery Efforts
The action against Sonko highlights the tax authority’s use of statutory recovery mechanisms to pursue alleged outstanding tax liabilities through third parties. By directing banks to surrender funds held on behalf of taxpayers, KRA can pursue recovery without relying solely on direct payments from the individuals or entities concerned. However, the notice concerns an alleged tax liability, and the recovery process will depend on the funds available through the appointed agent and the applicable legal procedures.
KRA has not indicated in the information contained in the notice whether the full amount has been recovered. The development adds to the tax authority’s efforts to enforce compliance and collect outstanding revenue owed to the government.
