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Taxman bets on digital market to beat Sh1.7tr goal

BUSINESS
By Graham Kajilwa | October 14th 2021

Kenya Revenue Authority Commissioner General Githii Mburu speaking during the launch of the Taxpayers month on October  4, 2021. [Wilberforce Okwiri,Standard]

Kenya Revenue Authority (KRA) is optimistic about collecting more revenue this year compared to the last financial year. The taxman is pegging the increase on the digital service tax and collaborations with other government agencies to surpass the Sh1.7 trillion collected in 2020/21.

The 2020/21 collection was Sh16.8 billion more than the set target.

KRA Commissioner General Githii Mburu said the taxman is on course to achieve its target of collecting Sh5 billion from the digital market space.

“We are actually ahead of our projections in that area, so we are on target in terms of what we expected to collect but we are enhancing our strategy in that area,” he said.

“So we have started by encouraging them to self-declare and they are doing well,” he said.

The next step, noted Mburu, will be enforcement where KRA counterchecks with other State agencies, including other digital platforms, if the amount declared matches the actual revenues of the business.

“For those who are not paying the correct taxes, we will enforce the law,” said Mburu during the opening of a two-day tax summit in Nairobi held every year.

The digital service tax requires businesses to pay 1.5 per cent of their turnover for services or goods transacted. KRA targets 1,000 businesses in this quest.

Mburu also put tax evaders on notice, noting that KRA is counterchecking tax declarations and information with databases held with Kenya Power and the Lands office, among agencies, which are then linked with the business registration office, Registrar of Persons and Immigration Department.

“All these databases are available to us, so we mine the information and identify those people who have business transactions and then countercheck with the amount of taxes they are paying,” he said.

“If we find they are not paying, then we are able to send our investigators, reach out to them, audit them, investigate them and collect the money.”

National Treasury Chief Administrative Secretary Simiyu Wafukho exuded confidence that the taxman will surpass the 2020/21 targets.

He said KRA will still explore other legal avenues to attain its targets and recruit competent staff.

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