The United Democratic Alliance (UDA) has not remitted tax, national insurer and affordable housing dues from its staff for three years, denting revenue collection and universal healthcare plans by its party leader, President William Ruto.
Auditor-General Nancy Gathungu reveals in her most recent report on UDA that the party paid Sh128.2 million in salaries in the 2023/24 and 2024/25 financial years, but failed to deduct and remit the statutory dues from workers.
Ms Gathungu’s report states that auditors reviewed the party’s payroll and found that UDA should have paid Sh69.83 million to the Kenya Revenue Authority (KRA), Social Health Insurance Fund and the Lands and Housing ministry after deducting the amount from workers’ salaries.
“Review of the Party's financial statements revealed that the Party incurred expenditure totalling Kshs128, 208,145 in respect of employee costs, net pay. However, records indicate that the Party did not withhold any deductions in respect of Pay As You Earn (PAYE), National Social Security Fund (NSSF), Social Health lnsurance Fund (SHIF), or Affordable Housing Levy,” the audit report states.
“Failure by the Party to deduct and remit the PAYE and other statutory deductions denies the exchequer revenue and exposes the Party to penalties arising from the unremitted taxes, and also denies the employees social protection, envisaged in the law,” the report, dated December 2025 and before Parliament this month, further reads.
Further, the UDA Party did not withhold taxes and capacity building levy when paying Sh219.35 million to its suppliers in the 2024/25 financial year. The report does not indicate how much money UDA should have withheld from suppliers’ pay and remitted to the taxman.
UDA Party Chaiperson Cecily Mbarire (centre), flanked by UDA leaders, speaks to the media at the party headquarters in Nairobi on January 21, 2026.
Photo credit: Wilfred Nyangaresi | Nation Media Group
“This was contrary to Section (23\(2)(a) of the Public Finance Management Act, 2012, which highlights the responsibilities of Accounting Officers designated under the Constitution of Kenya, 2010, the Act or any other Act, and states that Accounting Officers shall comply with any tax or levy as may be provided for by legislation. In the circumstances, Management was in breach of the law,” Ms Gathungu’s report states.
Under Kenyan law, contractors are required to deduct 0.03 per cent of funds paid to suppliers in the capacity building levy.
The funds are used to train and enhance procurement skills of workers in publicly funded institutions.
Nation sent questions to Secretary General Hassan Omar, chairperson Cecily Mbarire and treasurer Japheth Nyakundi on the audit queries and what it means to President Ruto’s calls for tax compliance.
An official, who did not want to be mentioned as he is unauthorised to speak to the press but who said he had been asked to talk to us after we sent questions to the officials, said that the Auditor General’s report contained errors and failed to capture its current status following leadership changes that, he claimed, were necessitated by mismanagement and political interference in the party’s affairs.
He added that UDA has over 100,000 volunteers who only earn allowances but are not liable for PAYE. The party, he added, is absorbing many volunteers into its workforce in the current financial year.
President William Ruto addresses aspirants for the 2027 General Election at State House, Nairobi on February 04, 2026.
Photo credit: PCS
“We are in full compliance. We don’t have any arrears. Check with KRA. We have our compliance certificate, including on SHIF. The Auditor-General erred in her report,” said the senior finance official who called us after we sent questions to Mr Omar.
On the issue of VAT and supplier payments, the ruling party argued that political parties are not commercial entities and therefore the tax obligations cited in the report may have been misunderstood.
“Political parties don’t charge VAT. Parties are not in business. VAT on our side is an expenditure. We pay VAT ourselves, but we don’t transfer the taxes,” he said.
The UDA official attributed the alleged lapses to what he termed “poor management” under former Secretary General Cleophas Malala, saying the party’s leadership was forced to act after internal wrangles disrupted operations.
“It became a political problem. We had issues with former SG Malala and former deputy party leader Rigathi Gachagua. They interfered with the running of the party,” he said.
He added: “We kicked out the SG because of poor management of the party. The current leadership is up to date with the statutory deductions.”
But Mr Malala dismissed the allegations, insisting that indeed, the party does not pay taxes.
“The problem originates from the party leadership. At one point, tablets intended for grassroots elections were smuggled into the country, and no customs duty or import taxes were paid. When I raised the issue with the steering management committee, I was dismissed and told “Serikali haiwezi lipa serikali (The government does not pay government),” Mr Malala said in a response to the Nation.
The accounts official insisted that UDA bosses offered satisfactory explanations to the Auditor-General. He added that the KRA, SHIF and Ministry of Lands and Housing have all confirmed that the party is in compliance with all statutory deductions.
Ms Gathungu's report, however, did not capture any responses by management to the failure to deduct and remit the statutory deductions.
The Democratic Party's (DP) Justin Muturi weighed in on the anomaly, accusing UDA of preaching water and drinking wine.
"You cannot build credibility on enforcement while practicing exemption. You cannot demand sacrifice from citizens while shielding your own from the same burden," Mr Muturi, a former National Assembly Speaker and Attorney General, said.
"Kenyans are being told these deductions are necessary, beneficial, and patriotic. Yet within the ruling party, there is a different reality, one of avoidance, non-compliance, and quiet privilege," he added.
Aside from violating multiple Kenyan laws, the non-compliance by UDA also dent plans by its party leader, Dr Ruto, for full tax compliance by every Kenyan, provision of universal healthcare by government and affordable housing for the most vulnerable in society.
During the National Assembly’s Post-Election Seminar on January 30, 2023, Dr Ruto vowed to ensure that all citizens are tax compliant.
“All I am saying is that the good people who are used to exempting themselves from paying tax, their day is up. Every citizen must pay tax. And doesn’t matter, even if they sponsor demonstrations so that they don’t pay tax, I want to promise them, they will pay tax. This country is not the animal farm, where some are more equal than others. We are going to have a society where every citizen carries a fair share of our burden to raise taxes. I am not talking about additional taxes, I am talking about taxes that have been agreed upon by Parliament and passed into law,” Dr Ruto said during the seminar.
President William Ruto (centre), Deputy President Prof Kindiki Kithure (left), UDA Chairperson Cecily Mbarire (second right) and Secretary General Hassan Omar (right) during the UDA National Governing Council meeting at State House, Nairobi on January 26, 2026.
Photo credit: PCS
The President has on many occasions stressed that tax compliance will help Kenya meet its financial obligations while relying on collected revenue for infrastructure development, and ease the pressure of loans.
Ms Gathungu’s report means that UDA was one of the contributors to the KRA’s missed targets in the 2024/25 financial year. In that fiscal period, the KRA missed the Sh2.305 trillion target set by the National Treasury by Sh48 billion.
In the 2024/25 financial year, UDA received Sh481.4 million from the Political Parties Fund, a rise from the previous fiscal period when it got Sh316 million.
The party also received Sh154.9 million from its members in the form of subscriptions and contributions. Another Sh11.9 million hit the party’s bank accounts in contributions and donations from members of the public, while Sh9.6 million was listed as miscellaneous revenue.
UDA spent Sh217 million on administrative expenses, Sh219 million on initiatives for special interest groups and Sh247.6 on advocacy and electoral expenses. This left the party with a Sh39 million deficit.
The party has assets worth Sh301.6 million, comprising of vehicles, furniture, equipment and money in bank accounts.
Ms Gathungu has also completed and tabled at the National Assembly, an audit report for the Orange Democratic Movement (ODM) for the financial year ending June, 2025.
The only issue raised in the report is ODM’s budget deficit of Sh1.035 billion. ODM had a budget of Sh1.387 billion, but only received Sh298.3 million. While below the expected disbursement, the amount was still higher than the Sh157.6 million received in the previous financial year.
The underfunding, Ms Gathungu warned in her report, could affect ODM’s activities.
President William Ruto and UDA Party leaders when the Head of State hosted UDA grassroots leaders from Nyeri County at Sagana State Lodge, in Nyeri on January 17, 2026.
Photo credit: PCS
ODM also received Sh1.7 million in membership fees, Sh51.4 million in contributions and donations from members of the public and Sh69,000 in miscellaneous revenue.
In the UDA report, the public auditor has also pointed out violations of affirmative action and climate change financing requirements.
The party did not have any person living with a disability in its employment at the time Ms Gathungu completed her audit.
Article 54(2) of the Constitution requires at least five per cent of people in publicly funded institutions, whether elective or appointive, to be persons living with disabilities.
The Climate Change Regulations, 2021 also require all publicly funded institutions to dedicate a portion of their annual budget to initiative that combat challenges brought about by climate change.
