NAIROBI, Kenya, Oct 28 – Manufactures are set to get a boost this year as government is set to use Sh21.97 billion towards Value Added Tax returns settlements.
Treasury Cabinet secretary Henry Rotich says treasury recently released Sh7.09 billion for the settlement of tax refunds mainly VAT and already more than 80 per cent of this amount has been paid out.
Rotich says the rest will be released in November once the claims pending are verified.
The Sh21.97 billion figure is inclusive of Sh1.2 billion monthly allocations that KRA uses to settle claims.
“The funds will significantly enhance cash positions for manufactures. I want to assure you that we will continue to support our businesses so that they can compete globally,” he stated during the Tax Payers Day celebrations.
Manufactures were owed about 19.3 billion in refund claims at the end of 2013.
He said that KRA will continue with the new approach towards tax payers where KRA focuses on facilitation of paying taxes rather than confrontation.
KRA, he noted, will continue to invest in technology geared towards automating tax services so as to make tax payment more convenient.
“I salute our patriotic taxpayers and encourage them to continue working with us to rally all Kenyans to the embrace our clarion call of placing our development agenda under our drivers seat through paying taxes.
On his part, President Uhuru Kenyatta urged KRA to continue working hard in order to further improve tax collection.
“I am proud to note that as a country we have accepted the critical importance of domestic resource mobilization as the key driver of our development agenda,” he added.
Kenya has been financing over 90 percent of budget through domestic resources.
Tax collection has grown five-fold from about Sh200 million in 2002, to Sh1.2 trillion in 2015/16.
“It is through the contributions of citizens that this administration has, over the last few years, overseen the successful implementation of devolution and invested heavily in infrastructure, security, health education services and affordable energy,” he noted.
Kenya is eyeing to raise revenue to 25 percent of Gross Domestic Product (GDP) from the current 20 percent in the next five years through tax reforms that include the modernisation of income tax with the Bill expected to be ready in the first half of 2017.