KRA Announces New Action Against iTax Defaulters

Kenya Revenue Authority (KRA) has unleashed a new plan to block iTax defaulters from the import/export business.

According to Business Daily, the taxman will roll-out the plan in April, a move aimed at boosting compliance.

The bid will be implemented through the Integrated Customs Management System (iCMS) and will connect to electronic tax-filing system iTax.

Following the integration of the two systems, KRA will seamlessly flag out tax cheats.

"The customs system will have capabilities to share data with iTax so that importers who are not compliant in terms of filing their domestic taxes returns are not able to make their customs declarations," Commissioner-General John Njiraini stated.

Consequently, those importing or exporting goods will be barred from the business unless they make customs declaration.

"We expect by March, we will have fully rolled out everything including the marine cargo which is the bigger part," Njiraini added.

Kenya Association of Manufacturers (KAM) welcomed the implementation of the new customs management system saying it will curb smuggling of goods into the country through the Port of Mombasa.

KAM CEO Phyllis Wakiaga noted that the iCMS linkage with other platforms will boost compliance and lessen the tax burden on businesses largely operating in the formal sector.

"If this system can increase the taxation base and eventually a decision is made to decrease taxation rate such as corporate tax from 30 per cent to say 22 per cent (Africa average corporate tax) and VAT from 16 per cent to a lower rate," Wakiaga was quoted.

She further indicated that the move will improve the competitiveness of manufacturers' goods and encourage more investors.