Kenya Revenue Authority announced the suspension of all tax relief payments with effect from Tuesday, February 28.
According to a notice issued on the same day, the taxman explained that the move was aimed at enabling the authority to enhance the processes related to the payment of tax refunds, exemptions, waivers, and abandonments.
KRA explained that the move was part of the government's strategy to collect more tax and stop the unexplained loss of collected revenue.
Moreover, the authority noted that the suspension followed concerns from taxpayers to restructure rules and procedures governing tax exemptions.
"The Kenya revenue authority in concurrence with the National Treasury and Economic planning has suspended all tax relief payments until further notice.
“The improvement is part of the government’s plan to seal revenue leakage and enable KRA to mobilise more taxes towards the country’s development," the statement read in part.
Additionally, the announcement noted that the suspension and the ongoing review of tax reliefs was also aimed at increasing the impact of tax expenditure on economic growth.
"This is part of the aggressive revenue mobilisation plan aimed at enhancing revenue collection and redirecting resources to finance priority growth supporting programmes.
"It will be achieved by minimising tax expenditure and aligning it with international best practices for better internal revenue," the authority added.
KRA further revealed that in five years, it had granted tax reliefs and incentives of up to Ksh610 billion averaging to Ksh122 billion every year.
In addition, it noted that the changes in the processes would ensure equal processing of tax reliefs and offer permissible issuance of tax exemptions.
"This move is aimed at powering the Bottom up Transformation Agenda(BETA).
"KRA will continue working closely with taxpayers to resolve arising issues for ease of tax compliance," the authority added.
