KRA seeks help to curb tax evasion

March 10, 2011
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, NAIROBI, Kenya, Mar 10 – The Kenya Revenue Authority (KRA) is now urging business associations to embrace self regulation that will ensure that all their members are tax complaint.

Commissioner General Michael Waweru recommends that such associations should employ measures that would deal with errant members that evade tax.

"You can achieve this by putting in place an internal disciplinary mechanism to deal with members who are bent on spoiling your good name. I want to urge you to look at the bigger picture as you go on with your business," said Mr Waweru through his Commissioner of Domestic Taxes, Alice Owuor.

Such a move would complement the authority\’s effort to improve its revenue administration structures and increase its revenue collection. It would further have the multiplier effect of enabling the country to attract more investments and employment opportunities.

"It pains us every time our local business people attempt to engage in activities designed to reduce their tax liability through illegal means. But when businesses uphold high ethical standards, there is certainty that is created in the economy in terms of returns on investments, level playing field and fair competition," said the commissioner during a seminar with the United Business Association (UBA).

The seminar is one of such forums that KRA has been conducting to assist it receive useful feedback on how its revenue administration reforms have been impacting businesses and how it can improve on them.

While the automation of most of its services has enable the Authority to seal many loopholes that taxpayers used to evade tax or those used by its officers to perpetrate corrupt deals, it has also caused hitches that hinder their smooth roll-outs and pose problems to taxpayers.

One such problem is the teething problem being experienced with the newly introduced Authorised Economic Operator scheme that is aimed at giving preferential treatment to taxpayers who have demonstrated exceptional compliance with the revenue statutes.

While appealing for patience from the taxpayers, KRA expressed its commitment to addressing the challenges just like they had tried to deal with the constraint of Value Added Tax (VAT) refunds.

Considerable progress, Mr Waweru said, has been done to clear the backlog that in turns affects businesses cash flow.

And while acknowledging that some progress had been made, UBA Chairman Bhupendra Shah urged Treasury to allocate more resources to the KRA to enable it make faster refunds.

The government\’s target to have new and genuine tax claims paid within 100 days has largely not been achieved because of lack of adequate funds to do so. KRA has in the past three years paid an average of Sh13billion annually in VAT refunds but receives only a small percentage of what it requires from Treasury.

On the business association\’s front, Mr Shah pledged that they would prevail upon their members to toe the line in terms of doing \’clean\’ business but also called upon KRA to weed out illegitimate businesses that bring unfair competition and eat into their market share.

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