KRA Plans Tighter Tax Net For Small Enterprises
- Aug
- 12
KRA Plans Tighter Tax Net For Small Enterprises
Small Enterprises Taxed Heavily
Kenya Revenue Authority (KRA) is considering integrating more small and micro-entrepreneurs into the tax base by fast tracking absorption during licensing by country governments.
The move, which will net business people when paying for registration or renewal of licenses, is expected to deepen the tax base and help the taxman meet its tax target, which is currently short of.
KRA collected Kshs.1 trillion against a projection of Kshs.1,086 trillion in the 2014-15 budget in what is said to be the slowest growth in the last decade.
Speaking during a tax summit at Strathmore University, KRA commissioner general Mr. John Njiraini said they are betting on new measures to enhance compliance and boost revenue collection in the future.
The authority is investing in modern mechanisms by simplifying process through changes and policies, and how things work internally.
“We are providing more convenience so as to ease payment of taxes and encourage tax compliance”, said Mr. Njiraini, adding that this is the first time that KRA has changed its approach from tax administration to tax facilitation.
The intention is to change from enforcement to facilitation so that the public sees KRA as a partner and not adversary. “We go to some markets and they shut down because they see KRA has caught up with them”, said the commissioner general, adding that KRA needs to address the frameworks regarding the tax policies, a move which is set to start soon.
Vivo Energy Kenya managing director Mr. Polycarp Igathe urged KRA to rope in more informed sector players, adding that harassment of businesses should stop to facilitate revenue collection. “Independent tax agents should be encouraged so as to raise tax compliance”, he said.
The paradigm shift in taxation should be tax taxation should stop being a pain”, said KPMG tax partner Mr. Richard Ndung’u, adding that there should be some flat transaction taxes so as to ease administration and make it easy for businesses to operate.
Meanwhile, KRA Mt. Kenya region has surpassed its annual target collection this financial year by hitting Kshs.8.2 billion against a projection of Kshs.8 billion.
The rise, according to Regional General Manager, Mr. Wilfred Okemwa, was at 103 per cent, with the taxes mainly collected from small-scale taxpayers.
This was only tax collected from the small-scale taxpayers in the region as other big organizations have their transactions handled by KRA headquarters in Nairobi, he said.
Mr. Okemwa said that Nyeri Office, which collects taxes from Nyeri, Laikipia, Kirinyaga and some parts of Nyandarua counties, had seen revenue generated by traders rise from Kshs.3.8 billion this financial year.
“This increment represents 117 per cent, hence the office has been rated the best in the four KRA regions in the country,” he said.
Mr. Okemwa, who was speaking in Kerugoya town when he paid a courtesy call on Fortune Sacco after it emerged the highest taxpayer in Kirinyaga, said KRA is working hard to ensure tax collection was carried out online.
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