Sixty two of the workers were arrested at the KRA's Times Towers headquarters in the afternoon in a fresh corruption purge meant to plug leakages that cost the country billions of shillings in tax revenues.
KRA, which is this year targeting a 40 percent growth in tax returns, has consistently missed its targets.
The reasons for this include tax-related misconduct such as theft, cheating in the declaration of return, corruption, collusion and soliciting bribes from tax cheats.
The authority, which recently established an Intelligence and Strategic Operations Department to combat tax evasion, cracked the whip on Friday after four months of investigations.
“The practices in question include facilitation of fraudulent clearance of cargo, fraudulent amendment of tax returns so as to help taxpayers evade taxes and the irregular issuance of Tax Compliance Certificates,” the authority said in a statement.
The taxman said the bulk of the cases touched on staff based in Nairobi.
Sixty one of those arrested were from the domestic taxes department and 14 from customs and border control.
Those arrested in Nairobi were taken to the Directorate of Criminal Investigations (DCI) for questioning and are expected to be presented in court on Monday.
In 2018, KRA fired 85 officers and instituted 15 cases of lifestyle audits for its staff on suspicion of aiding tax evasion.
Meanwhile, the Kenya Revenue Authority (KRA) has set sights on businesses using the Internet to market and sell products in a renewed bid to reduce revenue leakage through tax evasion.
The taxman says some of the businesses, which have invested in online channels to provide services and drive sales were neither paying taxes nor filing annual returns.
“KRA would like to advise that unless income or supply is expressly exempt in the law, appropriate taxes should be paid,” the agency said in a statement.
"KRA would, therefore, like to remind taxpayers that the self-assessment regime requires them to file and pay taxes."
Firms with annual revenue of more than Sh5m are under the law required to register for value-added tax (VAT) obligation. This will see them charge the standard 16 percent tax on supplies, among other taxes, and remit the same to the taxman.
Those that generate less than Sh5 million a year are, on the other hand, obligated to pay presumptive tax at the rate of 15 per cent of the annual single business permit fee issued by a county government in a law enforced in January this year.
The taxman said earlier in the year it has invested heavily in intelligent technological systems capable of spying on transactions by businesses and homes.
Online businesses do not, however, have physical addresses or legal structures in the jurisdictions they operate, making it easy to escape the taxman’s noose as well as counties which issue business permits.
The KRA has singled out taxation of the emerging digital economy, a headache for global revenue agencies, as a major risk to meeting the Sh6.1 trillion target in the three-year period through June 2021.
“The digital economy … comes with its own set of challenges, including new business models built on mobile and Web-based transactions,” the agency says in the corporate plan for the period.
Also officers of the Ethics and Anti-Corruption Commission (EACC) on Monday arrested two Kenya Revenue Authority (KRA) officials for allegedly soliciting a Sh1 million bribe from a trader based in Mwea, Kirinyaga County.
Charles Rasugu, the EACC's central manager, said the officials sought the bribe in order to facilitate the hospital proprietor's tax evasion.
He identified them as George Kimani Gachuki, a revenue officer from Nyeri, and Stephen Okelo, whose position at their Embu office he could not reveal immediately.
Rasugu said that the trader, whom he did not name for legal reasons, contacted them with the complaint about a week ago so a joint operation was launched.
“The hospital had tax arrears of Sh2.5 million and the two officials were [helping the] businessman to avoid paying. They are alleged to have advised him to pay Sh500,000 to the KRA, give them Sh1 million and be left with Sh1 million, he explained.
“They had already received a bribe of Sh550,000. We arrested them as they went to collect the balance,” he told the Nation.
He said it was Kimani who had gone to collect the balance of Sh450,000 when EACC detectives swung into action at about 3pm.
The two were taken to the Nyeri and Embu police stations for interrogation.
“The Office of Director of Public Prosecution will determine whether they will be charged in court,” the central boss said.
The EACC, KRA and the Directorate of Criminal Investigations have recently made several arrests over suspected tax evasion plots.
In December 2018, DPP Noordin Haji directed that 18 individuals be charged with various offences relating to tax evasion, which has led to perennial shortfall in KRA collections.
Among the accused were Kenya Bureau of Standards chief executive Charles Ongwae and former Quality Assurance director Eric Kiptoo.
Manufacturers of alcoholic drinks are also facing the accusation of avoiding tax payments - the DCI is looking into companies including Africa Spirits Limited, Platinum Distillers Limited and Two Cousins Distillers-Munene Industry.
Rasugu noted that complaints of bribery are common at the government’s revenue collection points and noted the negative impact on the economy.