British American Tobacco Kenya (BAT Kenya) has refuted allegations of tax evasion and profit under-declaration amounting to billions of shillings.
The allegations stem from an analysis conducted by The Investigative Desk, in collaboration with the University of Bath’s Tobacco Control Research Group (TCRG) and Tax Justice Network Africa.
The report, which claims a $93 million (Sh12.1 billion) discrepancy in BAT Kenya’s revenue for 2017 and 2018, was dismissed on Tuesday by the company’s Managing Director, Crispin Achola, who described the findings as “conjecture” and accused the investigative team of misrepresenting the company’s financial operations.
The analysis reviewed six years of BAT Kenya’s annual reports and compared them with production data supplied to the Kenya Revenue Authority (KRA), internal government documents, and industry data on cigarette consumption and pricing.
BAT Kenya defended its financial integrity, emphasizing that its reports comply with both local regulations and international standards and are audited by external firms and regulators.
“It is disheartening to see that The Investigative Desk chose to ignore the facts in favour of sensational and misleading reporting. BAT Kenya is weighing its options regarding the impacts of this erroneous reporting,” said Achola.
The company reaffirmed its commitment to transparency, noting that as a publicly listed entity on the Nairobi Securities Exchange (NSE), it publishes financial disclosures in line with regulatory and international reporting standards.
The Investigative Desk’s report alleges inconsistencies in BAT Kenya’s financial statements, pointing out that the company has reported declining cigarette sales while production data suggests otherwise.
According to the report, in 2017, BAT Kenya stated that its cigarette sales dropped by seven percent, whereas production data showed a 2.3 percent increase.
The report further asserts that BAT Kenya’s estimated retail value for cigarettes produced in 2017 stood at Sh13 billion (approximately $126 million at the then-exchange rate of Sh76), which was 37 percent higher than the Sh9.5 billion revenue declared in the company’s annual reports.
BAT Kenya countered these claims by reiterating that both external auditors and regulators audited its books, including for the years in question. The company emphasized that its financial practices adhere to all applicable regulations and international standards.
