Tax Recovery: KRA Names First Community Bank Agent to Collect KSh 623.39M From SonkoTax Recovery: KRA Names First Community Bank Agent to Collect KSh 623.39M From Sonko
Key Highlights
- The Kenya Revenue Authority has appointed First Community Bank as its agent to collect KSh 623.39M ($4.80M) it says former Nairobi Governor Mike Sonko owes in income tax for 2015 to 2019.
- Interest of KSh 298.72M ($2.30M) makes up almost half the demand, alongside principal tax of KSh 308.92M ($2.38M) and penalties of KSh 15.76M ($0.12M).
- The demand is KRA's claim, and reports do not say how much the bank holds for Mr Sonko or whether he has challenged the notice.
The Kenya Revenue Authority (KRA) has appointed First Community Bank as its agent to collect KSh 623.39M ($4.80M) it says former Nairobi Governor Mike Sonko owes in individual income tax for January 2015 to December 2019.
The notice, dated 12 October 2026, matters beyond one taxpayer because it shows how KRA can reach money held by a third party. The figure is KRA's claim; Mr Sonko's response was not reported.
How the KSh 623.39M demand is built
According to Business Today Kenya, the demand breaks down into principal tax of KSh 308.92M ($2.38M), penalties of KSh 15.76M ($0.12M) and interest of KSh 298.72M ($2.30M). Interest is almost half the total. The notice does not explain how interest built up year by year.
KRA relies on Section 42 of the Tax Procedures Act, 2015, which lets it appoint a third party that holds or owes money to a taxpayer as a recovery agent. The Act is published by Kenya Law.
What the agency notice requires of the bank
The bank must file a return setting out any money it holds for Mr Sonko, or owes him, and remit funds towards the claim. It could be personally liable for the specified amount if it fails to comply without reasonable cause. A partial payment does not end recovery, because the notice "remains in force until the amount specified has been recovered", according to the report.
The reports do not say how much money the bank holds for Mr Sonko, whether any of the amount has been recovered, or whether he has challenged the notice. It is also unclear how much the bank can remit or whether further legal proceedings could change recovery.
Why interest matters to taxpayers
As Mwenendo earlier reported on how compliance costs are rising for Kenyan businesses, tax and records obligations are widening. The Sonko demand shows the cost of an unresolved assessment: interest of KSh 298.72M ($2.30M) is almost equal to the principal.
Mwenendo earlier reported that Kenyan bank loans cost an average 14.34% in August, a reminder that money owed to the state and to lenders both grow with time. Taxpayers who dispute an assessment should seek advice on their rights and deadlines rather than assume a notice can be ignored.
In Summary
- Who is involved?
- KRA, former Nairobi Governor Mike Sonko and First Community Bank as appointed agent.
- What does KRA claim?
- KSh 623.39M ($4.80M) in individual income tax, penalties and interest.
- When was the notice issued?
- 12 October 2026, covering tax years January 2015 to December 2019.
- Where does the money come from?
- Funds First Community Bank holds for, or owes to, Mr Sonko.
- Why can KRA use the bank?
- Section 42 of the Tax Procedures Act, 2015 allows third-party recovery agents.
- How does the notice work?
- The bank must file a return and remit funds, and the notice stays in force until the amount is recovered.