Kenya loses billions in tax revenues in the informal sector due to untraced money transactions between business owners and buyers.
During the 2015 Kenya Revenue Authority Annual Tax Summit held in Nairobi on Wednesday, several panellists — including KPMG’s Josphat Mwaura, Vivo Energy’s Polycarp Igathe and Commissioner-General John Njiraini — argued that Kenya should collect Sh1.9 trillion in tax revenue compared with the current Sh1.2 trillion target.
TECHNOLOGY USE
The taxman blames the potential Sh700 billion tax loss on “unintelligent” and ineffective systems it has been using to collect revenue.
The commissioner-general said the authority will now provide the public with more convenient mechanisms for paying taxes as it seeks to leverage technology to boost revenue collection.
“Pin Certificate is an example of enhancement of the system. Today, you only need your mobile phone to acquire a pin,” said Mr Njiraini.
In a quest to satisfy the taxpayer, the KRA seeks to use technology to achieve full electronic customer service and enhance operational efficiency and service delivery.
Even as the KRA bemoans the loss of tax revenue in the informal sector, panellists accused corporate regulators of harassing businesses at the start-up level and hence strangling the SMEs’ potential.
WIDER TAX NET
Recently, the authority has moved to widen its tax base in an ambitious plan seeking to raise the number of active Kenya taxpayers to 4 million in the next two years against the present 1.6 million.
The new strategy seeks to rope in SMEs, which have often eluded the taxman’s scrutiny, and boda boda operators.
“KRA will engage the SME sector to better understand taxpayers in the SMEs category,” said Mr Njiraini during the launch of “Taxpayers Month”.
The taxman aims to double annual collections to Sh2.5 trillion by 2017.
NEW CORPORATE STRATEGY
Furthermore, the KRA has also announced its intention to transform from an enforcement body to a service one.
“We will henceforth do it the right way; we confess we have been doing it the wrong way,” said Mr Njiraini.
The taxman promised to create a staff establishment that is professional, courteous, accessible and pro-active in solving customer problems in the transformation bid.
Additionally, the authority plans to educate business owners and corporates on the importance of paying taxes in the spirit of KRA’s “Taxpayers Month”.
By WINFRED KURIA
