Don't shift burden of compliance to taxpayers

The Kenya Revenue Authority will soon begin punishing individuals who buy goods or services from persons or entities that fail to declare their income. That is fairly good and understandable, but innocent taxpayers must not suffer for this.

According to the new requirement, it does not matter if the purchaser or buyer is up-to-date in his tax records, KRA will aggressively go after them as long as the records of both parties do not match.

The Domestic Taxes Department states that the buyer will bear the cost of the seller refusing or failing to file tax returns, a scenario that seeks to penalise a buyer for trading with a non-tax-compliant seller. Normally, the Government appoints value added tax agents to collect the consumption tax on its behalf. This includes, for example, supermarkets. It is not clear whether the latest measure will apply to shoppers who buy goods from retail stores, which brings into question the scalability of this programme that KRA wants to use to shore up tax collection. Taxpayers are already overburdened with tedious processing of filing tax returns. A lot of time and money has been wasted on these processes, even in instances when KRA already has all that information. President Uhuru Kenyatta tried to do away with this repetitive process but KRA lobbied for its return.

It is our position that the Government should not try to shift the burden of ensuring tax compliance to the taxpayer. It must do its work of ensuring all taxes are paid and let the citizen honour his tax obligations.