•Yet, in a remarkable display of optimism, the National Treasury approved a budget of Sh23.7 billion for the taxman in the 2023/24 fiscal year.
•However, after failing to meet its quarterly and half year targets amid harsh economic times for Kenyans and businesses, the exchequer has barged.
Image: CHARLENE MALWA:
The Kenya Revenue Authority is expected to increase its revenue hunt in the coming months receiving an additional Sh11 billion-budget allocation.
KRA had sought Sh61.8 billion to operate ‘comfortably", in achieving the governments planned Sh3.6 trillion collection target.
The National Treasury on its part approved a budget of Sh23.7 billion for the taxman in the 2023/24 fiscal year less than half of what KRA had requested.
This allocation consisted of Sh23.6 billion for recurrent expenses and Sh122.4 million for development financing, amounting to a mere 0.83 percent—well below the minimum two percent funding necessary to achieve the revenue target.
However, after failing to meet its quarterly and half-year targets amid harsh economic times for Kenyans and businesses, the exchequer has increased the allocation.
“Because of the importance of KRA my Cabinet Secretary and I decided to give an additional Sh10.982 billion to KRA. We are now in the process of giving them exchequer so that they can push to make sure they raise the revenue,” Treasury Principal Secretary told MPs.
The PS said the funds would be used to increase KRA personnel after the taxman complained of staff shortage that has been hampering revenue collection efforts.
Kiptoo added that the funding would come in the second supplementary budget with the Treasury so far having released Sh1 billion.
As per its corporate plan, KRA says it requires 4,650 additional staff "for effective revenue mobilisation and operations to deliver on the target.
With an addition of Sh11 billion, the taxman will now step up its operations, which have in the past few months not turned well with a section of businesses.
The authority had sought allocations of Sh37.01 billion for staff compensation, recruitment, and skill development, Sh7.9 billion for revenue mobilisation and operational activities and Sh9 billion for existing contracted services related to revenue collection and operations.
Additionally, the authority is in need of Sh2.45 billion for leasing office space spanning at least 402,043 square feet, and Sh3.14 billion for technology, innovation, and digitisation aimed at bolstering compliance efforts and expanding the tax base.
In the plan KRA had this financial year targeted to recruit 3,000 staff at Sh4.8 billion, 1,350 Revenue Service Assistants (RSAs) at Sh1.2 billion and has also reinstated the Graduate Trainee (GT) programme to ensure availability of relevant skilled workforce for revenue mobilisation.
About 500 GT personnel were targeted at the cost of Sh1.1 billion. The authority also requires an annual budget of Sh782 million to engage students and new graduates in attachment and internship programmes in compliance with the government directive.
The move comes at a time that Kenyan commercial banks have started implementing the Common Reporting Standards (CRS), a tax procedures regulation of 2023.
This regulation requires all Kenyan banks, trusts, and other financial institutions to report and share information about foreign account holders with the Kenya Revenue Authority (KRA) as the taxman steps up its efforts to nab tax evaders and beneficiaries of illicit wealth.
The taxman has requested data that includes account stakeholders, address, jurisdiction, residence, tax identification number such as the Personal Identification Number or functional equivalent, as well as date and place of birth.
The Kenya Bankers Association says all the information will be submitted electronically using technology approved or provided by the commissioner and in the format required by the taxman to ensure security of data being shared as required by the regulations.