KRA issues stern warning to tax evaders, closes in on staff

KRA Chairman Marsden Madoka. The authority expects staff to be courteous while handling taxpayers. [PHOTO: JONAH ONYANGO/STANDARD]

By JAMES ANYANZWA

Kenya Revenue Authority (KRA) has put tax evaders on notice, saying they will face the full wrath of the law. The taxman said time for free riders is long gone and those who fail to comply with tax obligations would be arrested and have their properties impounded.

The authority also warned KRA staff colluding with tax offenders, saying they risk going to jail in addition to termination of their employment contracts.

“We are concerned about taxpayers who do not remit their fair share of taxes and yet they want to enjoy similar services like those who are paying,” Major (Rtd) Marsden Madoka, KRA chairman, said.

He said the authority would spare no efforts in ensuring attachment of their properties and having them charged in a court of law.

“And the staff who collude with them will be dismissed and legal action taken against them to ensure recovery of the unpaid taxes,” said Madoka, who was speaking during the official launch of the 10th taxpayers’ week in Nairobi yesterday. Madoka also told KRA employees to embrace the right attitude while dealing with the taxpayers, saying automation of the authority’s functions alone was not enough to deliver high quality services.

Quality of services

“Automation alone is not a magic bullet required to deliver the quality of services required by taxpayers. We need the right attitude from all our staff,” he said.

Madoka added that the authority expects its staff to be courteous and considerate in handling the taxpayers.

“We expect a high level of integrity and humility while performing your noble mandate,” he said.

During the event KRA in collaboration the Japan International Corporation Agency launched a short message service (SMS) that would enable taxpayers to access various information from the authority.

KRA surpassed its first quarter collection target for the 2013/2014 financial year by Sh3.6 billion fuelled by reforms in the Value Added Tax (VAT) law.

The taxman collected a total of Sh228.4 billion during the period from July to September 2013 against a target of Sh224.8 billion.

However the authority failed to meet its revenue collection targets for the 2012/13 financial year owing to a volatile political environment and non-passage of the controversial VAT Bill.

Hurdles in implementing excise taxes on financial services further compounded the taxman’s misery.

Official data shows the taxman collected Sh800.4 billion against the original target of Sh881.2 billion, missing its target by a massive Sh81 billion.

Previous year

The collections, however, represented a 13.2 per cent growth over the previous year’s (2011/2012) figure of Sh707.3 billion.

Economic growth dropped from 5.6 per cent in 2010 to 4.4 per cent in 2011 as inflation skyrocketed to a high of 18.9 per cent in December; the exchange rate fluctuated throughout the year while oil prices also took an upward trend.

These factors, coupled with the decision by the government to resort to tax measures like removal of excise tax on kerosene, continuing stay on the implementation of the common external tariff on rice to allow importation at 35 per cent as opposed to 75 per cent, impacted heavily on tax collections.

Others were remission of duty on imported wheat from 10 to zero per cent, and remission of duty on imported maize to cushion the poor.

Petroleum levies and indirect domestic taxes recorded the poorest performance.

KRA, just like other tax administrations worldwide, faces a major challenge in collection of various taxes.