KRA set to monitor your bank and mobile transactions to optimize compliance

National Treasury Cabinet Secretary Henry Rotich (right), KRA Commissioner General John Njiraini (middle) and former Chief Justice Dr.Willy Mutunga (left) during the launch of KRA Taxpayers’ Month in Nairobi on October 1. Photo/Courtesy

The Kenya Revenue Authority (KRA) is planning to net an additional half-a-million taxpayers to raise Sh60 billion by targeting their mobile phone data and professional bodies.

Under the new plan KRA will try to match data from bank accounts with holders’ professions, including doctors, real estate developers and suppliers to ensure that everybody pays their fair share of taxes.

Currently, only four million people pay taxes in a country with 18 million voters. It’s hoped that expanding KRA’s mandate under the new plan would enable it to collect more revenue as the country grapples with an ever-widening budget deficit.

Speaking at the launch of the annual Taxpayers’ Month in Nairobi, the Commissioner General John Njiraini said  the approach, commonly internally referred to as Data Driven Compliance, is meant not only to help the commission optimise compliance and audit interventions but in addition to assure objectivity in the commission’s engagement with taxpayers.

“In this regard, our revamped tax dispute resolution programme will provide taxpayers with a credible, transparent and customer-friendly process that removes perceptions of unfairness and underhand dealings in the resolution of tax disputes,” he added.

KRA aims to substantially reduce the number of tax disputes finding their way into the judicial system, with the ultimate goal being to resolve at least 80 per cent of tax disputes internally.

KRA is also targeting presumptive tax, which has replaced the now abolished turnover tax.
The tax will be calculated at 15 per cent of the business permit or trading licence fees issued to informal sector players and will be final with effect from January 1, next year.

According to financial results posted by the National Treasury, KRA collected Sh204.7 billion in the first three months of the financial year against a target of Sh1.6 trillion.

The tax body has had a history of underperforming on Treasury tax targets and in May this year the latter reduced tax estimates to Sh1.415 trillion.

In January, the taxman requested that the State reduce targets from Sh1.49 trillion to Sh1.439 trillion. Even this turned out to be too ambitious.

Kenya’s financing deficit over the past few years has been oscillating between 8.4 per cent in 2014 to 7.4 per cent in 2015, 8.8 per cent in 2016 and last year it stood at 6.9 per cent.

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