Kenya Revenue Authority (KRA) may be forced to rethink its tax collection strategy after wealthy Kenyans made moves to deny it Ksh200 billion in uncollected taxes.
The authority had earlier unveilled a plan to lift the veil on the faces of obscure billionaires in the country after being granted access to their alleged secret investments.
Ever since, KRA has experienced a surge in taxpayers challenging notices filed at Tax Appeals Tribunal (TAT) impeding the crackdown by the authority.
The petitions have stalled the authority's enforcement actions such as asset freeze, deactivation of Personal Identification Numbers (PINs) and travel bans which is crucial in the recovery of the unpaid taxes.
KRA Commissioner-General Githii Mburu noted that the cases filed at the TAT had increased by 31% to 408 in a period of nine months.
"At the Tax Appeals Tribunal, we have over Ksh200 billion there, we want those disputes resolved and those taxpayers to come forward through alternative dispute resolution," stated Mburu according to Business Daily.
He also revealed that as long as the cases are active at the tribunal, the authority could not enforce stiff measures to ensure increased revenue collection from the individuals.
With the recent development, KRA is seeking to have the wealthy individuals seek alternative means to settle matters outside of the courts.
"We will allow them repayment plans, and if they are not going to pay everything together, we are going to be as accommodative as possible," he added.
In the new regulations enforced in October 2020, Kenyan companies would be expected to submit information about individual investors who own more that 10% shares.
KRA, security agencies and the Financial Reporting Centre (FRC) were also handed access to KRA PINs, national ID or passport copies, postal addresses, residential addresses, occupations, telephone numbers and the date when the investors became beneficial owners of the said companies.
According to data from NSE, 77% of investors’ wealth at the stock exchange is held by undisclosed shareholders.
