UDA Staff Don’t Pay Taxes: Audit Says Party Failed to Remit Over KSh 69 Million

The ruling United Democratic Alliance (UDA) party has been put on the spot after a report by the Office of the Auditor General (OAG) raised concerns over unpaid statutory deductions.

According to the audit report, the party failed to deduct and remit mandatory payroll taxes and contributions for the 2023/2024 and 2024/2025 financial years.

The report states that UDA processed staff salaries amounting to KSh 128,208,145, but did not make deductions for key statutory payments such as PAYE, NSSF, SHIF and the Affordable Housing Levy.

The Auditor General noted that deductions worth KSh 69,830,714 should have been withheld and sent to the relevant government agencies.

Out of this amount, KSh 35,003,822 relates to the 2023/2024 financial year, while KSh 34,826,892 is linked to the 2024/2025 financial year.

The report further explained that the failure to make these deductions is against Kenyan tax and labour laws.

Under Section 37(1) of the Income Tax Act, employers are required to deduct PAYE from employee salaries and remit it to the Kenya Revenue Authority (KRA).

The audit also cited the Affordable Housing Act, 2024, which requires employees to contribute 1.5 percent of their salary, with the employer matching the same amount.

In addition, the NSSF Act, 2013 requires pension contributions to be made, shared equally between the employer and the employee.

The Auditor General warned that the failure to remit these deductions not only denies the government revenue but also affects employees by denying them social protection benefits provided under Kenyan law.

Procurement Tax Issues

The report also raised concerns over procurement tax compliance.

According to the findings, UDA paid suppliers KSh 219,350,149 for goods and services without deducting the required 0.03 percent Public Procurement Capacity Building Levy.

This levy is mandatory under the Public Procurement Capacity Building Levy Order, 2023.

Further, the audit revealed that withholding tax deducted from suppliers was allegedly not remitted to KRA as required by law.