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KRA posts 13pc rise in returns

NAIROBI, Kenya, Oct 7 – The Kenya Revenue Authority (KRA) has posted a 13.2 percent growth in collections to Sh140.4 billion in the first quarter of 2010/2011financial year (July to September).

This was attributed to the stable macroeconomic environment and the improved economic performance in the country in the last one year driven mainly by the upturn in sectors such as agriculture, construction and manufacturing.

“During the first quarter of the financial year, the economy continued on its robust recovery trend with second quarter 2010 GDP (Gross Domestic Product) growing by 5.4 percent compared 4.8 percent recorded in the first quarter of 2010. This performance enabled KRA to achieve significant growth,” said Commissioner General Michael Waweru in a statement.

The Customs Services Department collected Sh51.3 billion in the first quarter while the domestic taxes raised Sh88.5 billion, which represented a growth rate of 12.7 percent over the same period last year.

A standoff between the Energy Minister and oil marketers over the excise duty which accounts for 53 percent of all petroleum taxes however saw revenue collected from this area decline by 5.5 percent to Sh15.07 billion.

The new policy that requires the Roads Ministry to withhold only 50 percent of Value Added Tax for construction companies down from the previous 100 percent also undermined (VAT) inflows resulting in a 2.5 percent growth to Sh20.8 billion.

Mr Waweru however recounted the various administrative measures that they implemented in the period under review such as the taxpayer audits and recruitment to enhance revenue collections.

Some 153, 359 new taxpayers were brought into the tax net while the Authority managed to collect Sh1.6 billion in tax arrears during the three-month period.
The enhancement of the use of electronic tracking system in monitoring cargo transfers as well as the rolling out of a valuation system that has enabled the identification of goods prone to undervaluation have all gone a long way improving service delivery, he further pointed out.

The Commissioner General called on all taxpayers to embrace the online services which would not only reduce their compliance costs but also go a long way in enabling KRA to enhance its service delivery.

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“Focus is being placed on import related activities in diverse sectors such as telecommunications and food processing. The Authority is actively engaged internationally participating in fora for the exchange of information relevant for tax purposes,” he said.

Mr Waweru further disclosed that they were exploring the possibilities of exploiting money transfer services in making payments which when approved would be implemented under the Common Cash Receipting System which facilitates the electronic payment of duties, fees and taxes.

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