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Kenya president, facing cash crunch, accuses tax agency of graft

FILE PHOTO: Kenya's President William Ruto

NAIROBI (Reuters) - Kenya's President William Ruto on Friday accused the tax collection agency's staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.

Ruto, who was elected last August on a platform of helping the poor, has had a rough ride in the first months of his term due to growing government debt repayments, revenue collection shortfalls and persistently high prices of basic commodities.

Public service employees have complained of salary delays in recent months while local authorities have threatened to shut down their operations to protest against delayed cash disbursements from the national government.

"Collusion, wanton bribe-taking and general corruption continue to pervade operations of KRA (Kenya Revenue Authority)," Ruto told KRA's management and board members at an event beamed live on his social media pages.

The government's efforts to boost tax collection were being hampered by unscrupulous staff at KRA, he said, who spent their time helping corrupt taxpayers to evade paying.

KRA declined to comment.

Kenyan authorities have been fighting corruption and the tax collection agency has come under scrutiny. In May 2019, 75 KRA staff were arrested on suspicion of abetting tax evasion and bribery.

Ruto also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past, to prevent the government from sealing loopholes.

"I have to be candid because I have a job to do," the president said.

KRA has not issued its latest tax collection figures but local media outlets said it collected 1.57 trillion shillings ($11.50 billion) in the 10 months to the end of April, meaning it has just two months to meet the government's target of 2.1 trillion by the end of June.

In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming other nations like South Africa, Ruto said.

To shore up revenue, his administration has proposed a raft of tax increases in spending proposals that will be presented to parliament next month, angering citizens and the opposition.

"The (finance) bill prepared by the Kenya Kwanza regime is a punishment that Kenyans cannot and should not entertain," the opposition Azimio coalition said this month, referring to Ruto's Kenya Kwanza political coalition.

($1 = 136.5000 Kenyan shillings)

(Reporting by Duncan Miriri; Editing by Susan Fenton)