Tax defaulters put on notice

October 19, 2009

, NAIROBI, Kenya Oct 19- The Kenya Revenue Authority has vowed to crack the whip on defaulting taxpayers following revelations it was loosing billions of shillings in un paid levies.

KRA Commissioner General Michael Waweru said on Monday, the authority was on course to meet this year’s revenue targets but admitted failure to pay taxes may undermine progress.

Earlier in July, the taxman reported a miss in revenue targets for the 2008/09 fiscal year by Sh12.3 billion.

In the 2009/2010 financial year KRA is targeting to raise Sh545 billion. KRA revenue will account for Sh515 billion while Sh30 billion will be collected from the various agency revenues that KRA gets.

“It is a fact a great majority of taxpayers are compliant, however, there is a small number who have been a stumbling block to us,” Mr Waweru said.

Mr Waweru said over the years, the government had gone a long way in extending tax privileges to a cross section of taxpayers, but a number of unscrupulous parties were abusing these privileges.

He sighted the tax exemption on personal effects for returning students as one of the areas that was being blatantly abused.

“How does a student who has been overseas for three years, studying, manage to bring back a car worth 15 million shillings?” he questioned promising to review such incentives if the trend persisted.

Mr Waweru also put forex bureaus operating as banks on notice. He said some forex operators were receiving deposits and paying interest to depositors despite the fact that they were not licensed to operate as commercial banks.

“Some of these bureaus transfer funds illegally circumventing the tax system leading to loss of government revenue.” He said promising to carry out sting operations on such institutions.

Submission of false refund claims, change of import details to reduce tax liability amendments of ship details to facilitate dumping of goods have become common practice in Kenya, according to Mr Waweru.

Stemming out corruption has become an integral part of the authority’s role in discharging its duties.

In the past two years, KRA has sent close to 70 of its employees packing over links to corrupt dealings.

The transport department, revenue audits, customs and cargo verifications branches remain the most compromised areas in KRA.

 “It takes two to tango there is always a giver and a taker and all are equal before the law and we will work tirelessly in stemming out this vice.”

Mr Waweru was speaking during the launch of the Taxpayers week in Nairobi.

The weeklong celebrations will give, the public an opportunity to attend tax clinics to help them better understand their tax obligations as well as an opportunity to get an explanation of KRA Online products.

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