KRA banking on innovation to hit Sh1.8 trillion target

Kenya Revenue Authority is confident that it will manage its Sh1.8 trillion collection target for the financial year 2021-2020 on effective technology.

Speaking at the launch of this year's Taxpayers' Month, KRA chairman Francis Muthaura said the agency has in past years modernised its surveillance infrastructure, sealing revenue loss loopholes and increasing efficiency.

The optimism is on the back of recent achievement that saw the taxman surpass  its revenue target for the first quarter of the financial year by Sh14.9 billion as businesses continue to defy Covid-19 drawbacks.

The taxman collected Sh476.7 billion between July – September against a target of Sh461.7 3 billion.

"The performance reflects a sustained revenue growth in the first three months of the year, with a performance rate of 103.2 per cent and growth of 30 per cent," KRA commissioner general  Githii Mburu said. 

The government tax agency played down recent court rulings that dealt a blow on its tax expectations. 

High Court Judge declared sections of the Income Tax Act illegal, invalidating the introduction of Minimum Tax that imposed a one per cent levy on total sales from the beginning of January this year.

A day later, the same court suspended adjusted excise duty , a move blocking the agency to raise at least Sh400 billion from adjusted excise duty.

He said KRA will eye more revenue going forward through  enhanced scanning and intelligence -led verification of import cargo.

It also plans to intensify  fight against tax evasion to ensure that no revenue is lost.  

To increase revenue collection and achieve the set target, the taxman says it will expand the tax base by tapping into new taxable income sources.

''Through the target revenue collection, the Authority is expected to sustain an annual average growth of 16.9 per cent over the period in which nominal GDP growth is also projected to grow at 11.2 per cent,'' Mburu said. 

Mburu highlighted some of projects implemented by the tax agency in recent times to ensure faster services to customers. 

He said that KRA’s journey to improved customer satisfaction is further pegged on availability across the 47 counties through KRA service centres, tax service offices (TSOs) and satellite stations.

''At the apex of the customer service enhancement journey is KRA’s transformation from an Authority to Kenya Revenue Service (KRS),'' Mburu said. 

While tax disputes are inevitable, KRA is keen to improve resolution of the disputes as an additional tool of enhancing customer satisfaction.

During the Financial Year 2020/2021, through the ADR process, KRA concluded 552 cases up from 284 cases from the previous year.

The ADR mechanism which was implemented by KRA in 2015 has seen significant growth in terms of the number of cases resolved and the revenue unlocked.

This positive trajectory is marked by a 109 per cent growth in number of cases and 389per cent growth in revenue unlocked this financial year 2020/2021 (July 2020-March 2021) when compared to a similar period last financial year 2019/2020.

He added that KRA’s customer satisfaction journey is also anchored on improved trade facilitation to enhance tax compliance.

The revenue agency said it  has enhanced trade facilitation in Kenya and across borders through; better technology, effective refunds management processes and multi-agency collaborations.

It cited National Cargo De-consolidation Centre (NCDC) in Nairobi which is jointly ran by KRA and Kenya Railways Corporation (KRC).

So far, small-scale importers have benefitted from NCDC through reduced last mile costs due to proximity.

Between November 2020 when the facility was launched and August 2021, KRA had cleared over 1,021 containers and collected over Sh1 billion in taxes.

This year’s Taxpayers Month is themed ‘Pamoja Twaweza.’

It highlights the collective role and contribution of both taxpayers and KRA towards the current socioeconomic environment.