The Kenya Revenue Authority (KRA) has turned to First Community Bank in its efforts to recover Ksh 623.39 million in unpaid taxes linked to former Nairobi Governor Mike Sonko.
In a notice dated October 12, 2026, the tax authority appointed the lender as an agent for collecting the money, directing it to remit funds held on Sonko’s behalf or any money it owes him towards the outstanding tax claim.
The demand covers individual income tax for the period between January 2015 and December 2019. KRA is seeking a total of Ksh 623,389,105, comprising the principal tax, penalties and accumulated interest.
The notice gives the bank a direct role in the recovery process, allowing the tax authority to pursue money available through a third party instead of relying solely on payments made directly by the taxpayer.
Interest accounts for nearly half of the tax demand
According to the notice, the principal tax amounts to Ksh 308,916,928. KRA has added Ksh 15,756,912 in penalties and Ksh 298,715,265 in interest, bringing the total claim to Ksh 623,389,105.
Interest makes up almost half of the amount being sought. The figures show how an outstanding tax liability can grow considerably when interest accumulates over time.
Although the principal tax remains the largest individual component, the interest has added nearly Sh299 million to the original amount. The penalties account for a smaller portion of the total.
The notice does not provide a detailed breakdown of how the interest accumulated over the five-year tax period or explain the calculations for each year. It establishes the total amount KRA is seeking and the components making up the demand.
The figures also do not establish how much money First Community Bank holds for Sonko. The amount ultimately recovered through the bank will depend on the funds available and the requirements of the notice.
Why KRA has involved the bank
KRA has relied on Section 42 of the Tax Procedures Act, 2015, which allows the authority to appoint a third party holding money for a taxpayer, or owing money to that taxpayer, as an agent for tax recovery.
Under this provision, a bank can be required to surrender money covered by an agency notice towards settling a tax liability. The arrangement gives KRA another route to collect outstanding taxes where funds are held by a financial institution.
First Community Bank has also been directed to submit a return detailing any money it holds on Sonko’s behalf.
The notice warns that the bank could become personally liable for the specified amount if it fails to comply without reasonable cause. It further states that partial payment will not automatically end the recovery process, as the notice remains in force until the amount specified has been recovered.
This means the bank’s obligations extend beyond acknowledging receipt of the directive. It must establish what funds are available and comply with the notice in accordance with the law.
The latest action concerns KRA’s demand for the stated tax liability. It does not, on its own, confirm that the entire amount has been recovered or establish whether Sonko has challenged this particular notice.
The development also leaves unanswered how much the bank can remit towards the claim and whether further legal proceedings will affect the recovery process.
For now, KRA is seeking to collect Ksh 623.39 million in alleged tax arrears dating back to 2015, with First Community Bank required to act on the agency notice issued on October 12, 2026.
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