KeRRA Under Fire as Tax-Dodging Contractor Wins Major Migori Road Deal

The Kenya Rural Roads Authority is under mounting pressure after awarding a lucrative rural road contract in Migori County to a Nairobi firm that only recently escaped a bruising tax dispute with the Kenya Revenue Authority.

The move has triggered questions about the integrity of government procurement and whether state agencies are rewarding firms with questionable histories.

The tender covers the upgrade of the Agolomuok Otat Aora Chuduoro road in Suba Sub County.

The project promises to finally open up villages that have endured decades of muddy, impassable tracks.

It is expected to boost trade, improve access to health facilities and connect Nyatike, Ndhiwa and Suba areas along a rugged lakeside belt.

Contractors have already moved equipment to the site, and signage bearing the name of the main contractor, Takbir General Trading Company Limited, is up. For locals who have waited a lifetime for tarmac, the mobilisation sparked genuine excitement.

That joy was quickly interrupted. Until August this year, Takbir was locked in a tense battle at the Tax Appeals Tribunal.

KRA had demanded millions in backdated corporation tax and VAT, accusing the firm of inflating bank credits and underreporting revenue. Auditors claimed the discrepancies amounted to fraud under the Tax Procedures Act.

Takbir fought back and said KRA had misread its records.

It argued that routine interbank transfers, loans from directors and reversed entries had been wrongly classified as income. The company insisted the assessments were baseless.

On August 23, 2024, the tribunal ruled in Takbir’s favour and threw out the entire tax claim. Judges said KRA had failed to distinguish real business earnings from ordinary banking movements.

The ruling restored Takbir’s eligibility for public tenders that require a current tax compliance certificate.

The firm, founded in 2013 and based along Banda Street in Nairobi, has handled several rural road projects across the country.

The controversy gained momentum on Sunday when Treasury Cabinet Secretary John Mbadi Ng’ongo toured the site.

He praised President William Ruto’s administration for opening up historically neglected regions and shared a celebratory post online.

His remarks ignited immediate backlash from civil society and local leaders who questioned KeRRA’s choice of contractor.

“It raises concerns about the strength of due diligence. You cannot ignore a tribunal case that flagged opaque banking practices,” said Homa Bay activist Elijah Ochieng.

He argued that taxpayers deserved stronger safeguards, especially in a county that has endured broken promises on infrastructure for generations.

KeRRA dismissed the criticism.

Officials said the award was open, competitive and fully compliant with procurement law. They pointed out that Takbir had a valid tax compliance certificate and urged the public to judge the project by its impact, not its past legal battles.

A spokesperson said the new road would slash travel times and transform access to markets and hospitals.

Takbir declined immediate comment but confirmed it was fully mobilised and committed to delivering quality work.

For residents of Suba, the stakes remain high.

The region, a hub for maize, sorghum and sunflower farming, has lagged behind neighbouring counties that received tarmac years ago.

The Agolomuok Otat stretch is notorious for flooding and rocky outcrops that cut off villages after every downpour.

The project, listed as contract number KeRRA/09/19/2024-2025, aims for completion within 18 months.

As bulldozers roll in, KeRRA is facing a larger question.

Is a clean court ruling enough to justify awarding a major contract to a firm with a contested audit history? CS Mbadi has avoided the tax debate and instead urged the country to focus on development.

On the ground, opinions remain sharply divided. Many residents are thrilled to finally see tarmac coming.

Others fear the project carries a shadow that could return to haunt both KeRRA and the community if oversight slips.

For now, the road is both a beacon of hope and a test of accountability in a county long denied its share of public infrastructure.