British American Tobacco Kenya (BAT Kenya) has refuted allegations of tax evasion and profit under-declaration, following an investigative report that highlighted a $93 million (Sh12.1 billion) discrepancy in revenue reported for 2017 and 2018.
The report, published by The Investigative Desk in collaboration with the University of Bath’s Tobacco Control Research Group (TCRG) and Tax Justice Network Africa, scrutinized BAT Kenya’s financial records over six years. It compared the company’s annual reports with production data provided to the Kenya Revenue Authority (KRA), internal government documents, and cigarette consumption data.
However, BAT Kenya’s Managing Director, Crispin Achola, has dismissed the findings as “conjecture,” accusing the investigative team of misrepresenting the company’s operations. “It is disheartening to see that The Investigative Desk chose to ignore the facts in favour of sensational and misleading reporting,” Achola stated.
The Investigative Desk’s report argues that BAT Kenya’s financial statements contain contradictions, particularly in reported sales versus actual production. The report alleges that in 2017, BAT Kenya claimed in its annual report that cigarette sales had declined by seven percent, yet production data indicated a 2.3 percent increase. The retail value of the excess production was estimated at Sh13 billion—significantly higher than the Sh9.5 billion in revenue reported for that year.
In response, BAT Kenya has defended its financial transparency, emphasizing that its financial reports adhere to both local regulations and international standards. The company further stated that its accounts are audited by external firms and regulatory bodies, including during the years in question.
“As a public company listed on the Nairobi Securities Exchange, BAT Kenya publishes financial disclosures in its annual reports and audited financial statements in line with the applicable local regulations and international reporting standards,” Achola added.
The tax evasion claims come at a time when scrutiny of multinational corporations operating in Kenya is increasing, particularly regarding taxation and financial reporting. BAT Kenya has signaled its intent to challenge the report, saying it is weighing options on how to respond to what it describes as erroneous reporting.
The ongoing dispute raises broader concerns about corporate accountability and the role of investigative journalism in uncovering potential financial irregularities. Whether regulatory bodies such as KRA will launch an independent probe into BAT Kenya remains to be seen. However, for now, the cigarette manufacturer maintains that its financial books are open and compliant with all legal requirements.
