NAIROBI: Kenya Revenue Authority (KRA) is considering integrating more small and micro entrepreneurs into the tax base by fast tracking absorption during licensing by county governments.
The move, which will net business people when paying for registration or renewal of licences, is expected to deepen the tax base and help the taxman meet its tax target, which it is currently short of. KRA collected Sh1 trillion against a projection of Sh1.086 trillion in the 2014-15 budget in what is said to be the slowest growth in the last decade.
Speaking yesterday during a tax summit at Strathmore University, KRA commissioner general 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 processes 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 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 Polycarp Igathe urged KRA to rope in more informal sector players but warned the government to stop harassment of businesses 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 that taxation should stop being a pain,” said KPMG tax partner 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.
