KRA refunds taxpayers Sh5.6 billion, targets to clear backlog this year

Kenya Revenue Authority (KRA) has paid out Sh5.6 billion of the Sh7.1 billion tax refunds released from National Treasury.

This comes as a relief to companies and individual business people who have been waiting for the funds since the Parliament approved the release of the value added tax refunds in June just hours before close of last financial year.

“The refund process shows support to our manufacturers,” said National Treasury CS Henry Rotich. “I urge KRA to complete the remaining payments so that tax payers, especially manufacturers, have enough liquidity for their businesses.”

Once fully paid, it will leave out a balance of about Sh5 billion, with KRA promising to refund before close of the year. Some of the tax refunds have been outstanding for more than two financial years and will be key in supporting businesses.

“At the end of the year, we expect the process to be over. The new refunds are processed online so we expect it to be easy,” said KRA Commissioner General John Njiraini.

The arrears, he said, took long to be paid because as the authority’s policy, all refund claims had to be fully verified in order to avert paying fictitious firms or individuals. Njiraini added that with the online portal, itax, KRA processes about Sh1.2 billion in tax refunds every month since refunds now take between 60 and 90 days. The platform has about 2.2 million active taxpayers per month. Speaking in KRA offices in Nairobi during the launch of this year’s ‘Taxpayers’ Month’ that aims at increasing awareness on tax payment, Njiraini thanked taxpayers for the Sh1.2 trillion that was collected in 2015-16 financial year.

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The performance was very close to the target, with the Treasury boss describing it as impressive performance rate of 99.99 per cent. Rotich called on KRA to have in place even stiffer penalties to people and businesses who do not submit taxes to the national basket. “There are a few individuals who still wallow in the illusion that tax evasion pays. Such people are enemies of Kenya’s economy,” said Rotich.

The series of events will see KRA reach out to taxpayers to popularise need for tax compliance as well as pay individual visits to selected companies. The culmination will be a luncheon to celebrate distinguished taxpayers. The authority has been overhauling different areas to make filing of tax returns easier as well as seal loopholes of evasion.

Njiraini said KRA had given priority to internal reforms to change culture of the staff to taxpayers. Currently, it is undertaking ambitious technological convergence initiatives such as itax, integrated customs management system and data management systems.

“All these processes are expected to be substantially complete or integrated within the next 12 to 18 months. This will see KRA become paperless by 2018,” said Njiraini.

Having been awarded by Kenya Association of Manufacturers for supporting businesses, the Treasury boss challenged KRA to do more to enhance service delivery. “I look forward to KRA changing the name to KRS (Kenya Revenue Service),” said Rotich in parting shot. “This could make it more of a service agency since sometimes being a force scares Kenyans.”