KRA Promises Softer Approach to Taxpayers

Kenya Revenue Authority (KRA) has said it will engage taxpayers in a friendlier manner going forward, signalling a departure from the current trend where businesses are closed down and owners taken to court over tax arrears.

The move comes as the taxman is fast-tracking measures to increase tax revenues to 25 percent of Gross Domestic Product (GDP) from the current 15 percent of GDP.

According to the Budget Review and Outlook Paper published by the National Treasury, tax revenues as a share of GDP has been declining since 2013.

“The revenues declined from 18.2 percent in the financial year 2013/14 to 15.4 percent in the FY 2018/19, this decline was mainly associated with various challenges including increase in tax incentives, growth of the informal sectors which are hard to tax, change in business models, thus creating tax administrative bottlenecks,” the Treasury said.

Speaking on the sidelines of President William Ruto’s inauguration ceremony on Tuesday, KRA Commissioner-General, Githii Mburu, said the authority will now employ less aggression when collecting taxes. 

“Our call to Kenyans is to pay taxes. We are going to engage them in a more friendlier manner. A lot of dialogue, less aggression but more discussions,” he said.

Mburu’s sentiments were in response to President Ruto’s statement during his inauguration where he promised to turn KRA into a more people-friendly organisation. 

“We will make KRA more professional, efficient, responsive and people-friendly. I urge taxpayers to respond by undertaking their patriotic duty and pay taxes,” President Ruto said during his inauguration at Kasarani. 

He said the country urgently needed to expand its tax base, noting that his administration’s job-creation agenda and capitalising SMEs will go a long way in broadening Kenya’s tax bracket.

During the current 2022/23 financial year, KRA will be expected to collect a total of Sh2.14 trillion ordinary revenue up from Sh1.81 last financial year. This will go towards financing the country’s Sh3.3 trillion budget. On his part, Mburu said the tax authority was ready to do the job, noting that it has been surpassing its targets in the recent past.

“We are ready as KRA to do our best to support this government to achieve the aspirations of the Kenyan people. We discussed and agreed on how we are going to do our work and we are very committed to ensure that we collect all the revenues that are available within our economy to support our development agenda,” Mburu said. 

“This economy has a lot of money. If everyone does their part, then we are going to build our country. There is enough money in this country if all of us paid taxes,” he added.

Kenyans are expected to tighten their belts further as the government moves Budget Review and Outlook Paper, to address the declining revenue trends and ensure a fair taxation system, the government is developing a medium-term revenue strategy that would entrench predictability on tax rates by providing greater certainty of policy direction for investors.