KRA to be split into two for efficiency

October 22, 2013
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President Uhuru Kenyatta said the reforms will make KRA more responsive, efficient and effective in revenue collection/PSCU
President Uhuru Kenyatta said the reforms will make KRA more responsive, efficient and effective in revenue collection/PSCU
NAIROBI, Kenya, Oct 22 – The Kenya Revenue Authority (KRA) will be split into two semi autonomous entities – the Domestic or Inland Tax Agency and the Customs and Border Control Agency.

Making the announcement on Tuesday, President Uhuru Kenyatta said the reforms will make KRA more responsive, efficient and effective in revenue collection.

He said the move is in line with East African Community agreements and will facilitate trade and enhance security.

“In this endeavour, we are partly informed by recent border security challenges, as well as the East African Community Common Market Protocol which requires the establishment of a Single Customs Territory. The effect of that is free movement of goods in the region,” he said.

President Kenyatta spoke at this year’s KRA Taxpayers’ Day and award ceremony at Kenyatta International Conference Centre (KICC).

During the occasion, Safaricom scooped the top taxpayer award, followed by East African Breweries Limited (EABL) while the Teachers Service Commission (TSC) emerged third overall.

Other reforms, the President said, include automation of the tax system to enable taxpayers to submit their returns from the comfort of their offices and homes.

“By March 2014, we will have rolled out production accounting under the excise tax management system. All firms dealing in products that attract excise duties will be covered under this roll-out,” he said.

The President said the Government intends to make it cheaper, faster and easier for importers to lodge their import documentations. The documents include ships notification of arrival list, ship-and air-cargo manifests, Import Declaration Form (IDF), pre-clearance licenses and permits issued by Government agencies.

He said all required payments will be made through the planned single portal.

“The roll-out of the National Single Window system is scheduled for the end of this month, midnight of October, 31, 2013 and will commence with pre-clearance live of the documentations which I have mentioned earlier,” the President said.

The President said tax legislation, particularly excise and income tax regimes, will be reviewed and modernised, saying he expects an Excise Management Bill to be submitted to the National Assembly by December this year.

“This Bill will make the law on excise management simple, modern and easier to comply with. It will also align it with international best practice,” he said.

To conform to the Constitution, the President said, the Tax Appeals Tribunal Bill has been submitted to Parliament and goes into final debate this week.

He added that the process of consolidating and standardising all tax administration procedures is underway and the draft Taxpayer Code Bill will be ready by March next year. Presently the procedures are scattered in various legislations.

Given the increased exploration activity in the mining industry, the President said a robust fiscal regime to regulate and enforce taxation of income generated in the sector will be developed.

“We are reviewing the fiscal regimes currently existing under various legislations and, taking into account international best practice, we intend to consolidate them so that we have a clear framework that is applicable to the extractive industries in this country,” the President said.

He said the Government is implementing the reforms in order to better serve taxpayers and make it easy for them to comply. He urged taxpayers to embrace their tax obligation, saying anyone who fails to pay tax sabotages the shared vision of transforming Kenya into a middle income country.

Other speakers were National Treasury Cabinet Secretary Henry Rotich, KRA Chairman Maj (Rtd) Marsden Madoka and Commissioner-General John Njiraini.

(Story by Kazungu Chai)

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