The National Treasury has unveiled stringent tax exemption guidelines, with focus on the role of accounting officers in State entities.
To curb fraudulent tax refund claims, National Treasury Cabinet Secretary Henry Rotich has told accounting officers they would be personally responsible for all requests on tax exemptions and waivers.
Besides appending their signatures on a letter requesting exemptions, their initials will also appear on all the pages or documents supporting the request.
“These guidelines will enhance accountability in the processing, granting and administering of exemptions that are provided for in the tax laws,” said Treasury in a circular dated October 18, 2018 and signed by the CS.
“Of importance to note is that accounting officers requesting such exemptions/waivers will be accountable for the requests and approvals granted.”
The CS noted that the new guidelines would enhance accountability in the processing, granting and administering of exemptions.
“They will also protect and promote public interest and support the constitutional principle of the rule of law,” said Mr Rotich.
An accounting officer will not delegate the signing of the letter requesting exemptions to another person other than the Cabinet secretary unless they personally notify Treasury in writing.
All the letters shall have a paragraph in which the accounting officer confirms that the requested items shall be solely used for the specific project.
The letter should also contain details of the project being implemented, including its objectives and if the project was approved and factored in the budget.
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The start and end dates of the project must also be indicated.
Treasury also noted that it might reject a request for an exemption if the information is inaccurate, or there is no provision in the tax law to grant the request.
Another reason for rejection is the request not meeting the requirements for the special operating framework.
The National Treasury also said its officials and those from the Kenya Revenue Authority would make impromptu field visits to the projects being implemented.
“The purpose of these visits will be to confirm the status of the projects, use of the items in the approved master lists and verify specifics as provided when seeking information,” said Rotich.
“All the MDAs (ministries, departments and agencies) implementing the various projects are expected to provide full information during such visits. In the event that the goods and equipment imported or purchased locally under this framework were not utilised for the intended purpose, appropriate action shall be taken in accordance with the provisions of tax laws.”