Kenya tax body off target by Sh12b

July 13, 2009

, NAIROBI, Kenya, Jul 13 – The Kenya Revenue Authority  (KRA) has missed its revenue target for the  2008/09 fiscal year by Sh12.3 billion.

Commissioner General Michael Waweru  said on Monday  that  cumulative revenue collection for the year totaled Sh480.6 billion against a target of Sh492.9 billion collected  in 2007/08.

While attributing the deficit to a harsh operating environment,  Mr Waweru however expressed optimism that the revenue body  would meet its target of Sh545 billion for the new financial year despite the current deficit.

“During this fiscal year the performance of the economy was affected by the on-going financial crisis, high fuel and food prices, lagged effects of post election violence, and drought resulting from the failure of rains,” Mr Waweru said.

However  the KRA boss said indications are that business confidence within the country is picking up an indicator that the body’s collection will pick up too.

The domestic tax department was the largest contributor to the total numbers with a collection of 62.9 percent; Customs Services contributed 36.5 percent and road transport 0.7 percent of the total revenue collected.

“All revenue departments registered significant growth in collection with  Domestics  Department at 15.2 percent followed by Customs Services  Department at 14.0 percent and Road Transport  Department at 2.6 percent,” the Commissioner General said.

While admitting that tax fraud is posing a major challenge on the revenue body’s operations Mr Waweru said KRA was doing everything to overcome the challenge.

He cited the Eldoret International Airport and the Eastleigh areas where it is reported that most goods get into the country without paying taxes.

“Since this continues becoming a problem we are seeing on how we can introduce integrity testing programs even for our clients because it takes two to tangle,” Mr Waweru said.

He revealed that KRA  sacked 72 employees in the past one year  for engaging in corrupt activities

“On  July 16, our top management will meet the Kenya Anti-Corruption Commission to discuss how the Integrity Testing Programme, which we have been running together, can assist further in curbing corruption,” the Commissioner General said.

In the meantime,  Mr Waweru said that KRA would be adopting a new program called Block Management System that will hopefully improve the uptake of  Turnover Tax introduced last year to cover the small businesses.

“As is usual with any new tax, take up for this tax hasn’t been too good but with this new program we hope it will improve,” he said.

The  Turnover  Tax recorded an uptake of 30 percent but under the new program KRA will block different areas that host a number of small businesses and register them one by one.

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