Why KRA Needs To Optimize Tax Collection

Kenya’s economy is not yet stable due to the increasing foreign debt and inability by of the Kenya Revenue Authority to optimize tax collection. KRA is mandated to account for 95 per cent of the government’s ordinary revenues.

There is a need for the taxman to have efficient systems in place to enable the government to achieve the set goals. A recent research on tax compliance attitude in the Afro-barometer Journal revealed that if individuals perceive it to be difficult to evade tax in a country’s tax system, they are more likely to have a tax compliant attitude.

That’s to imply that, effectively, the manner of identifying eligible taxpayers, system of collecting and filing those tax returns and dealing with frauds related to tax compliance becomes fair and rigorous.

Last year Against the backdrop of foreign debt hitting the Sh5 trillion mark mid-2018 after the issuance of the Sh202 billion Eurobond in February this year, revenue collection ought to be meticulous to avoid the unnecessary missing to hit targets.

It is a controllable anticipation, unfortunately, that comes at a time when the payroll tax is set to pull down revenue collection owing to the PAYE reforms initiated last year and shrunk recruitment in the current fiscal year due to election turmoil as well as the court order put forth by the High Court to suspend excise duty collection planned by KRA on non-alcoholic drinks and cosmetic manufacturers.

According to the Auditor General, top companies had either failed or avoided paying taxes in some form, principally on grounds that KRA could have controlled it had it deployed the right measures and had scrupulous and ethical staff.

These reports from KRA’s staff, of which it’s never clear how they are dealt with after committing such acts, undermines KRA’s moral authority. The citizens then lack trust to pay taxes in the end. It also downplays efforts by any other body or by the authority itself to promote the need for Kenyans to pay their taxes with an understanding that their taxes will be handled well and utilized optimally.

About Paul Amisi

Don't get it twisted.

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