Written by Lisa Murimi
The Kenya Revenue Authority (KRA) has yet to refund Sh904.9 million in overpaid taxes to the National Social Security Fund (NSSF), nearly three decades after the funds were mistakenly remitted.
This revelation comes from Auditor General Nancy Gathungu’s report for the financial year ending June 2024.
According to the report, the tax arrears originate from income tax payments made in 1996 and 1997, despite NSSF’s exemption from paying income tax as a state-controlled pension fund.
The Auditor General noted that the Fund has not received any returns on the long-outstanding tax receivable balance of Sh940.3 million, which includes additional amounts owed by KRA beyond the initial overpayments.
The report criticizes NSSF for failing to aggressively pursue the refund, stating that no evidence was provided to show progress in recovering the overpaid taxes.
This inaction has resulted in the Fund missing out on potential interest income that could have benefited its members.
This delayed refund is part of broader financial improprieties at NSSF highlighted in the Auditor General’s report.
The Fund incurred a loss of over Sh16 billion due to questionable investments, idle assets, and lavish spending.
Notably, NSSF invested in two companies whose value dropped by 17.6%, costing members over Sh27 billion, and spent Sh12 billion on government premium bonds, later sold at a Sh272 million loss.
The Auditor General’s findings place pressure on both KRA to honor its refund obligations and on NSSF to take a more proactive stance in recovering the funds.
