Cowboy Contractor Ordered To Pay KRA Sh300 Million For Tax Evasion

A construction company with a trail of stalled projects and legal battles has been slapped with a Sh314 million tax bill by the High Court, exposing a pattern of financial irregularities that spans multiple government contracts worth billions of shillings.

Kiu Construction Company lost its second appeal on Friday after Justice Benjamin Musyoki upheld the Kenya Revenue Authority’s demand for unpaid taxes, ordering the firm to pay Sh277.8 million in corporation tax, Value Added Tax, and Pay As You Earn deductions, plus Sh36.4 million assessed on the director’s rental income.

The ruling comes as the company remains embroiled in multiple court cases and continues to face criticism over delayed project deliveries, including the controversial River Enziu bridge in Kitui County that has remained incomplete nearly three years after the tragic accident it was meant to prevent.

Court records reveal that Kiu Construction, managed by Kariuki Theuri, has been involved in at least four separate legal disputes in 2024 and 2025 alone, including cases involving loan defaults, contractual disputes, and now the massive tax evasion judgment.

Multiple Stalled Projects

The most high-profile of Kiu Construction’s troubled contracts is the Sh700 million River Enziu bridge project awarded by the Kenya Rural Roads Authority in April 2022.

The bridge was commissioned after 32 people, including church choir members heading to a wedding, perished when their bus was swept away by raging waters in December 2021.

Recent reports from July 2025 indicate that while work has “recently resumed after months of inactivity,” the project remains far from completion nearly four years after the tragedy.

Local residents continue to face life-threatening conditions during rainy seasons, with examination papers having to be delivered by helicopter to schools cut off by the flooded river.

The stalled bridge on River Enziu in Kitui County pictured on November 22, 2023. In December 2021, a 51-seater bus belonging to St. Joseph Seminary Mwingi ferrying Good Shephard Catholic Parish choir members that were heading to Nuu Catholic Church for a wedding plunged into the river killing 32 people.

The company has also been linked to the rehabilitation of Nanyuki Airstrip, a project awarded by the Kenya Airports Authority. Court documents from November 2024 reveal that Kiu Construction borrowed Sh85 million for this project, but the case suggests financial difficulties with the loan obligations.

Pattern of Financial Troubles

The tax evasion case dates back to KRA’s investigation of the company’s affairs between 2015 and 2019. Initially, the revenue authority demanded over Sh655 million from the company before revising the corporate demand down to Sh277 million in April 2021.

Justice Musyoka rejected Kiu Construction’s appeal, noting that the company had consistently missed statutory deadlines for filing objections and failed to seek proper extensions.

The firm’s lawyers attempted to challenge the merit of KRA’s tax assessments rather than addressing the procedural failures that led to their case being struck out by the Tax Appeals Tribunal.

“The appeal was unrelated to the findings of the tribunal and the court should not be conducting a fresh trial on facts that were not considered by the tribunal,” Justice Musyoka ruled in September 2025.

Workers Left Unpaid

The company’s financial woes appear to extend beyond tax obligations.

Workers at the River Enziu bridge site reported in December 2023 that their salaries were in arrears by five months, forcing them to down tools to demand payment.

“Our salaries are in arrears of five months. We have to be on a go-slow for us to be paid our wages,” one casual worker told journalists, speaking anonymously for fear of victimization.

Legal Battles Mount

Court records show Kiu Construction has been involved in multiple legal disputes, including a case with Karooooo Ltd (formerly Retriever Ltd) decided in July 2025, and an ongoing environment and land case with Motion Pictures Limited that was ruled on in February 2025.

The company has also faced legal action from Regent Auctioneers over loan defaults related to the Nanyuki Airstrip project, with the Court of Appeal handling the matter as recently as November 2024.

Questions Over Vetting Process

The mounting legal troubles raise serious questions about the government’s contractor vetting process and whether companies with questionable financial practices should be awarded critical public infrastructure contracts.

The case is particularly troubling given that the River Enziu bridge was meant to prevent future tragedies at a crossing that has claimed multiple lives over the years. Despite promises and significant public funding, the community remains vulnerable to the same risks that led to the December 2021 disaster.

As the company now faces the Sh314 million tax judgment, residents of the affected areas continue to wait for the infrastructure that could save lives, while taxpayers bear the cost of both the incomplete projects and the lengthy legal processes required to hold contractors accountable.

The Kenya Rural Roads Authority has not responded to questions about potential contract termination or alternative arrangements for completing the vital bridge project.​​​​​​​​​​​​​​​​