State to consolidate tax collection with counties

The Government through the Kenya Revenue Authority (KRA) is planning to incorporate county governments in consolidation of tax collection.

In a move that KRA is seeking expansion of the tax base to cover middle and lower class taxpayers, especially in the real estate sector, counties are expected to play a major role.“KRA has the technological machinery while counties have the ground base. This means with a mutual partnership we can benefit from the counties with both new and old taxpayers’ information which will in turn increase our tax payer data base,” said KRA Commissioner General John Njiraini at a recent media brief.

Mr Njiraini said the partnership will help get rid of confusion and overlapping of responsibilities which many Kenyans may not distinguish.

“Many real estate developers in the interior regions do not know that KRA deals with rental income while the government deals with land rates. Therefore, having one institution nominated to collect both taxes then it’s split for the two entities will be advisable,” Njiraini said.

Recently, the national government had come under scrutiny by the county governments following the Land Bill 2015 that seeks to return the management of land to the National Lands Commission. County Governors faulted the bill saying it was against the spirit of devolution, which will deny them revenue through land rates.

Commissioner of Domestic Taxes Alice Owuor acknowledged the intensity of the real estate sector in embracing devolution with many middle and low income developers investing in the counties.

“However, many of them are not knowledgeable with the business. This will require us to educate them, especially in expenditure and keeping records with the help of the technology through itax,” Owuor said.

KRA is looking forward to raise additional revenues to meet revised target of Sh5.2 trillion by 2018 in order to fully finance the country’s budget. Apart from counties, KRA will involve professional and Business Associations as well as International partners to leverage innovations and tax reforms.