A new investigative report titled Missing Millions has uncovered a significant discrepancy in the tax records of British American Tobacco Kenya (BATK). The study, conducted by The Investigative Desk in collaboration with the University of Bath and the Tax Justice Network Africa, suggests that BATK may have underreported revenue by up to 9.6 billion KES ($94 million) between 2017 and 2018. The report raises serious concerns about potential tax avoidance or evasion, amounting to an estimated $28 million in lost profit tax revenue.

Despite repeated requests for clarification, BATK has denied any wrongdoing, dismissing the allegations as "baseless" and insisting that it complies fully with Kenya’s tax laws. However, independent tax analysts argue that the discrepancies warrant a thorough investigation by the Kenya Revenue Authority (KRA). The KRA, responsible for corporate tax oversight, has remained conspicuously silent, raising concerns about regulatory effectiveness in Kenya’s taxation system.

This report delves into the Missing Millions findings, examining the financial irregularities, BATK’s response, and the broader implications for Kenyan farmers, consumers, and the country’s economic governance.

A web of financial discrepancies

The Missing Millions report meticulously examines BATK’s financial statements over six years, comparing them with government data and cigarette consumption records. The findings reveal a troubling pattern: BATK appears to have produced millions more cigarettes than it officially reported selling.

This discrepancy raises two critical possibilities: BATK underreported its revenue, thereby reducing its tax obligations; and BATK engaged in illicit practices such as smuggling, evading taxes on unreported cigarette sales. For instance: in 2017, BATK claimed a 7% drop in domestic sales, yet government production data indicated an actual increase of 2.3%.

In 2018, BATK reported 11 billion KES in revenue from domestic sales. However, independent market data suggests the real figure was closer to 16.8 billion KES—a staggering difference of over $50 million. "If the company truly made less money than expected, where did all the missing cigarettes go?" asks Leopoldo Parada, a tax law expert at King’s College London. "Without a plausible explanation, this looks like a case of aggressive tax planning, if not outright evasion."

BATK’s response and the KRA’s silence

Despite the damning evidence, BATK has remained defiant. In an official statement, the company categorically rejected the findings, stating: "BAT Kenya firmly rejects all allegations regarding discrepancies in our financial disclosures." The firm maintains that it fully complies with Kenya’s tax regulations. However, when pressed for additional financial details, BATK declined, citing "commercial confidentiality."

More concerning is the lack of response from the Kenya Revenue Authority (KRA). The tax authority has ignored multiple requests for comment, raising doubts about whether it has conducted—or intends to conduct—a formal investigation into the matter. "This report should at least trigger a tax review of BATK," says Kennedy Waituika, a fraud and audit expert. "If the KRA remains silent, it raises serious questions about the effectiveness of tax enforcement in Kenya."

BAT’s controversial tax practices worldwide

BATK’s suspected tax irregularities are not an isolated case. British American Tobacco (BAT) has a long history of aggressive tax planning and legal battles over tax evasion worldwide. In 2022, a Dutch court found BAT guilty of tax evasion, ruling that the company had deliberately excluded 1.8 billion euros in profits from tax authorities. This led to a 450-million-euro tax bill and a 106-million-euro fine.

In Bangladesh, BAT faced a $220 million tax claim for evading VAT (value-added tax), which it later appealed successfully. However, another $184 million tax evasion case is still pending. In Egypt, BAT settled a tax dispute for $68 million after initially facing a $150 million claim. Given these international precedents, the Missing Millions report suggests that BATK’s Kenyan operations deserve similar scrutiny.

Impact on Kenyan farmers and consumers

Beyond tax evasion concerns, the Missing Millions report highlights BATK’s exploitative relationship with Kenyan tobacco farmers. Most of Kenya’s tobacco is grown in Migori, where farmers work long hours under harsh conditions yet struggle to make ends meet. BATK provides farmers with seeds, pesticides, and fertilisers on credit but later deducts the costs from their earnings.

Many farmers claim that they are underpaid for their produce; that they are forced to accept unfair pricing dictated by BATK; and that after debt deductions, they barely make enough money to survive. "In the end, we barely have enough left to buy food," says Jonathan, a tobacco farmer in Migori. "Tobacco is not an edible crop, but we are stuck because we don’t know how to grow anything else."

The public health toll and the call for action

Meanwhile, tobacco consumption continues to have devastating effects on Kenyan public health: 12,000 Kenyans die annually from smoking-related illnesses. The economic cost—including healthcare expenses and lost productivity—is estimated at 47 billion KES ($333 million) per year. Despite this, BATK remains one of Kenya’s most powerful corporate players, influencing policy and resisting regulatory scrutiny.

The Missing Millions report presents a compelling case for an independent forensic audit of BATK’s financial dealings. Experts urge the following actions: the Kenya Revenue Authority (KRA) must investigate BATK’s tax discrepancies; the government should strengthen laws against multinational tax avoidance; and Kenya must hold corporations accountable for unethical business practices. Farmers need fairer contracts and better protections against corporate exploitation.

Kenya is currently struggling with rising debt, inflation, and tax burdens on ordinary citizens. Meanwhile, powerful corporations like BATK appear to operate with impunity, exploiting regulatory loopholes to avoid taxes.

"This is not just about BATK," says Wanjiku Nyoike, a tax justice advocate. "This is about corporate accountability and ensuring that multinationals pay their fair share of taxes like everyone else." Kenya’s leaders must act. The missing millions must be accounted for—not just for the sake of transparency, but for the Kenyan people, who bear the burden of lost tax revenues, public health costs, and corporate exploitation.

Conclusion

If Kenya is serious about tackling tax injustice, it must stand up to corporate giants like BATK. The government’s silence will only embolden other multinationals to follow the same playbook—undermining Kenya’s economy and robbing citizens of a fair future.