Kenya's tax compliance regulator, the Kenya Revenue Authority (KRA) has been put under pressure to meet a Sh1.7 Trillion target in revenue collection in the coming financial year. Consequently, the body has targeted more professionals and foreign bank account holders with tax increments.
Athletes, musicians as well as individuals who own foreign bank accounts have been issued with an ultimatum to officially declare such earnings and start paying taxes on them before the end of the year.
The directive targets prize money given to the athletes after a win in an international competition and earnings gained by artistes after performing at concerts abroad.
The apparent panic attempt at increasing revenue collections will place a heavy burden on these professionals, considering there are regulations in some of the countries where they perform that require taxation before they come back home.
The revenue authority has overturned a ruling delivered in 2008 by the then Deputy Prime Minister in charge of the Ministry of Finance, Uhuru Kenyatta, which said: “Kenyan sportsmen and artistes performing abroad are entitled to off-set tax on income earned abroad against tax charged in Kenya on such income provided they can prove that tax has been paid abroad.”
The KRA has been advocating for more of such new tax regulations to expand tax brackets and increase revenue collected.
At present, 10 million Kenyans are elligible for taxation yet only 2 million of these remit their taxes regularly.
This new development comes ahead of the highly anticipated reading of the 2017/18 Budget by the Finance Cabinet Secretary, Henry Rotich, scheduled for Thursday.
