Ndiritu Muriithi, the Chair of the Kenya Revenue Authority (KRA), has clarified the issue of the tax man going after Kenyans' mobile and bank money, explaining that the matter had been widely misunderstood.
In an interview with NTV's Fixing the Nation on Tuesday, July 29, Muriithi stated that KRA's initiative to promote tax technology does not entail accessing personal bank accounts or mobile money wallets.
"Not the mobile wallet. And not the bank account. KRA does not want access to people's bank accounts. We do not want access to your mobile wallet," Muriithi clarified.
The clarification comes in the wake of growing public concern about data privacy and potential overreach by the taxman. Reports had alleged that KRA might use new technology to monitor individual's financial accounts.
However, Muriithi has assured that the reform is focused solely on transaction-level data, not personal balances, spending habits, or account ownership.
"Think about a restaurant. When you pay, that bill has Value Added Tax (VAT). That VAT is going to go to the restaurant owner. Who will then have to account for it, creating more cost for them?," the boss stated.
"Why couldn't we switch it right there on the transaction? Because technology allows us to do so today. So that when you click pay, the 16 per cent that is supposed to go to KRA goes to KRA directly from that transaction," Muriithi explained.
KRA’s latest proposal bases on automating the collection of VAT during digital transactions. According to Muriithi, the tax should be switched directly to KRA when a payment is made instead of leaving business owners to file and remit it later.
Murithi hailed the move, saying it was working for other businesses, giving an example with betting companies where winnings are taxed at the source before payout.
"We have seen this working for betting companies. And betting companies today are quite happy because they had all kinds of difficulties when paying out winnings. Now we deal with it at the source, and everybody walks away nice and easy and clean. That's where we are going, there is no reason to worry," Muriithi assured Kenyans.
The KRA chairman acknowledged the concerns of many Kenyans, who fear the technological shift would introduce invasive financial scrutiny.
He assured them that there was no reason to worry, as no such thing would happen.
