How KRA plans to raise taxpayers’ number to 4 million from 1.6m

NAIROBI, KENYA: Kenya Revenue Authority (KRA) is targeting the small and medium sized enterprises to raise the number of active taxpayers to 4 million by 2018 from the current 1.6 million active taxpayers.

KRA plans to revamp the turnover tax strategy to focus on recruitment of SMEs.

Speaking during the flag off of a roadshow to mark the launch of KRA’s Taxpayers month, Commissioner General, John Njiraini said targeting the SME sector is one of the strategies being adopted by the authority to broaden the tax base.

“The authority will engage the SME sector to better understand taxpayers in this category, which will   place us in a stronger position to design and implement effective compliance strategies, which is critical in developing sustainable taxation systems,” said Njiraini.

During the roadshow, KRA will engage small and medium entrepreneurs with a view to improving their tax compliance. KRA will offer a broad range of services; including registering SMEs and assisting them file their returns.

Turnover tax was introduced in 2007 in respect of businesses with a turnover of more than 500,000 shillings and less than 5 million shillings per annum. It is applicable at a rate of 3 per cent on gross sales

Njiraini said many small and medium businesses’ do not register voluntarily, while those who do register often fail to keep adequate records, file tax returns, and settle their tax liabilities promptly.

“Hence in the small business context, opportunities for evasion are high and resources are often scarce for field auditing,” said Njiraini.

The authority announced plans to work closely with Counties to incorporate Personal Identification Number (PIN) to business licensing at the Counties, expanding the scope of services and activities for which PIN is a requirement and adopting a business classification, structure and tax rates similar to those being applied by the Counties. Currently, there are 8.1 million people in the PIN database.

This year, KRA has adopted the theme of ‘Building trust through taxpayer empowerment and facilitation’