KRA Tightens Screws to Collect Billions from Businesses

  • Kenya Revenue Authority signage on a building
    Kenya Revenue Authority signage on a building
  • The Kenya Revenue Authority (KRA) has issued a notice to businesses over non-compliance in the declaration and remitting of excise duty as it looks to meet its revenue collection targets.

    The tax collection agency reported collecting Ksh 144.6 billion in March 2021 which was an 11.2% revenue growth from the previous month.

    In a notice dated Tuesday, April 13, KRA affirmed that it was an offence to manufacture, offer for sale or be in possession of excisable goods not affixed with excise stamps or affixed with counterfeit stamps.

    "Members of the public and all persons who deal in excisable goods are encouraged to use the Soma Label App available on Apple Store and Play Store to check the authenticity of excise stamps," the agency advised.

    KRA offices in Nairobi.
    A file image of the reception area at KRA offices in Nairobi.

    KRA further warned manufacturers of packaging materials that it was an offence to produce counterfeit packaging materials or to manufacture packaging materials for packaging excisable goods without the authority of the licensed manufacturer of the excisable goods.

    "All VAT-registered suppliers are reminded of their obligation to issue tax invoices upon sale or delivery of taxable goods and services. Distributors, wholesalers, retailers and members of the public are urged to demand proper tax invoices upon purchase of goods and services," the agency added.

    Domestic Value Added Tax (VAT) collection has risen steadily over the past months, amounting to Ksh 17.017 billion registering improved growth of 4.2% compared to 1.6% growth in February 2021. 

    The KRA also started the implementation of the minimum tax in the Finance Act 2020 of 30th June 2020 introduced Minimum tax (MT), chargeable at the rate of one percent of the gross turnover. 

    The introduction of the Minimum tax was a strategy of expanding the tax base since it will rope in more people who were previously not paying tax.

    Also payable is the Digital Service Tax (DST) which is remitted from services offered through a digital marketplace.

    KRA is also implementing a number of revenue enhancement measures which include revamping the audit function, tax base expansion and enhanced debt programme, implementation of post-clearance audits, comprehensive audit of all exemptions, enhanced scanning and intelligence-led verification of cargo at the ports of entry.

    The taxman also continues to leverage technology to enhance efficiency in revenue collection. With enhanced operational efficiency, the authority is optimistic that the landscape of revenue mobilisation and collection in this country would be completely changed.

    KRA has also intensified its fight against tax evasion to ensure that no revenue is lost.

    The process to file returns on the KRA iTax portal.
    The log-in page of KRA's iTax portal.