Kenya Revenue Authority (KRA) has announced a raft of measures aimed at helping the 6.1 million Kenyan taxpayers access simplified policies and enhance openness in tax remittances.
This assurance headlined the two-day 7th Annual Tax Summit that took place on Wednesday, October 13, that brought together key stakeholders across the African continent.
Speaking during the event, KRA Commissioner General, Githii Mburu, noted that taxation is the largest source of government revenue and therefore, plays a key role in financing various sectors including education, health, and social amenities budget hence a critical component for a country’s wellbeing.
As a result, Mburu disclosed that the authority had taken seriously the recommendations provided by the Summit’s participants, which include needing to ensure simplicity and tax certainty of policy, regulatory framework and processes in tax administration.
“I take note of your commendation that national policy should seek to align the contradicting sectoral policies to enhance coherence. It should also interrogate the expenditure with the intention of creating surplus build-up from tax collection.”
“I affirm that simplification of tax policies can provide a predictable environment for investors and create opportunities that attract long-term investments. We will, therefore, continue working closely with the National Treasury and all our stakeholders to ensure that tax policies are simplified to enhance our processes and improve tax compliance,” stated Mburu.
He also acknowledged, during his closing remarks, that the authority was looking into widening the tax base by looking into other sectors to avoid the risk of overtaxing three major sectors which include manufacturing, banking and insurance and ICT.
This input is invaluable especially at a time when Kenya is implementing strategic tax base expansion initiatives aimed at improving revenue collection through exploration of nascent sectors of the economy.
Participants were also keen on ensuring the minimum cost of compliance to ease the tax burden from compliant taxpayers while changing the attitudes of the non-compliant ones.
The minimum cost of compliance can be achieved through the implementation of best practices including enhanced service delivery. This includes fast-tracking of refunds, transparency in the administration of incentives, ensuring high levels of integrity and better application of risk assessments.
“Through the Tax Base Expansion strategy, the Government is focusing on bringing into the tax net of two million taxpayers by the end of the Financial Year 2023/2024. In addition to the current number of active taxpayers, which stands at 6.1 million.”
“The Digital Economy is among industries that were earmarked in the Tax Base Expansion drive and are currently chargeable on services offered within the country by non-resident companies via the digital marketplace,” he added.
Covid-19 Effect
The Cabinet Secretary for Industrialization, Trade and Enterprise Development Betty Maina, who was part of the last plenary session of the event, observed that the country has plans to build resilient and local supply chains after emerging from the harsh realities of the unforgiving COVID-19 pandemic.
Kenya, through its membership of the African Continental Free Trade Area (AfCFTA), will seek to expand trade across Kenya’s borders and secure the future of businesses across the country.
''If we have learned anything from the COVID-19 times is the need to build resilient and local supply chains. As participants of the African Continental Free Trade Area (AfCFTA) we should work towards an environment that expands trade as opposed to just protecting it,” she stated.
The Customs department is a key component of regional and international trade. KRA Customs Administration is central to the success of the African Continental Free Trade Area agreement (AfCFTA).
Improved Customer relations
Panelists at the event also noted that improved customer experience, in this instance being taxpayers and businesses, goes a long way in cementing their relationship with the authority.
Titus Ndambuki, a Commissioner at the Ministry of Public Service and Gender explained that customers and businesses needed to be educated on the taxation process in order to use the tools to their advantage and grow their businesses.
“To have voluntary compliance, citizens need to understand what taxes do. They need to be educated on the importance of paying taxes. We need to move to customer obsession because citizens demand quality services from the government. We will also equip our customers with information in order for them to demand better services,” he stated.
At the event, the KRA Commissioner-General announced that the authority had already surpassed the Ksh5 billion target it is expected to collect from the digital space with plans to expand the revenue stream already in the pipeline.
The event was attended by Moses Kajubi, a Senior Public Sector Specialist Taxation at the World Bank, Pascal Bizimana Ruganintwali, the Commissioner of Rwanda Revenue Authority, and South African Revenue Service (SARS) Commissioner Edward Kieswetter.
Below is the video:
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