Appearing before Public Investment Committee(PIC) led by Mvita MP Abdulswamad Nassir, KRA Commissioner General James Mburu (pictured) said the Authority had so far collected Sh112 million of the Sh158 billion in tax arrears, an amount that committee members said had accumulated give that four years have since lapsed since the taxes were due/FILE -KRA
NAIROBI, Kenya, Sep 25 – The Kenya Revenue Authority (KRA) was on Wednesday put to task over failure to collect tax revenue arrears totaling Sh158 billion in the 2014/2015 financial year.
The concern was raised by former Auditor General Edward Ouko in his 2014/15 audit report.
“There were no records in respect of tax arrears disclosed under note 9.13, statement of outstanding revenue amounting to Sh158,008,209,235 as at June 30, 2015. It has not been possible under the circumstances to ascertain the accuracy of the arrears of revenue,” Ouko stated.
Appearing before Public Investment Committee(PIC) led by Mvita MP Abdulswamad Nassir, KRA Commissioner General James Mburu said the Authority had so far collected Sh112 million of the Sh158 billion in tax arrears, an amount that committee members said had accumulated give that four years have since lapsed since the taxes were due.
“You know that is a huge amount of money and if that is just for the year under review, it means more money is yet to be collected and if it accumulates then the country is bound to lose more money. What is the authority doing about it as of now?” Nassir posed.
Mburu was however quick to defend the authority saying, it has now incorporated better trategies to enable them to collect more tax. He vowed to ensure that everyone pays tax as required by law.
“Due to historical challenges a data cleaning initiative is in progress to further refine data on debt. I can assure you that we have now put up new resources and effective systems which are helping us collect more tax. We are collecting more than in the past and the centralized system of revenue collection that we are using is much better than the decentralized one,” Mburu said.
Mburu was also questioned over Value Added Tax (VAT) refunds, Ouko’s report indicating the agency paid VAT refunds amounting to Sh1.4 billion to 17 taxpayers.
The audit report further showed that records including a data management portal known as the Simba system, rotation registers and claimants for the related goods claimed to have been exported with customs value of Sh16 billion did not include exit reports and certificate of export.
“The government therefore appears to have lost uncollected VAT on goods totaling Sh.2,567,195,395 and irregular VAT refunds of Sh. 1,357,713,399,” Ouko indicated.
Committee members termed issues raised by auditor general as serious and called on KRA to follow due diligence in doing their work.
“It is not acceptable that someone comes to you, claims VAT refunds for goods exported yet there is no evidence of exportation. If 17 taxpayers claimed for refund, and those are the only ones that the Auditor General was able to identify.
“Then how many other people do we have outside there claiming money for exporting air. The authority needs to be serious,” Shinyalu MP Justus Kizito said.
In his response, Mburu said that they have provided documentary evidence to the Auditor General in form of extracts of entries from the Simba system as proof of exportation.
The committee resolved to give both the Auditor General’s representatives and those of KRA 10 days to ensure the issues raised are resolved and proper financial documents provided before the committee retreats to write its report.
