STRATEGY

KRA keen on digital economy as it targets more revenues

It continues expanding the tax base with the inclusion of the informal sector.

In Summary

•KRA is also tackling tax evasion and illicit trade as it aims to surpass its current financial year’s ordinary revenue target of Sh1.78 trillion.

•It surpassed the Sh1.652 trillion target for 2020/2021 with a surplus of Sh16.81 billion.

Kenya Revenue Authority Commissioner General Githii Mburu.
Kenya Revenue Authority Commissioner General Githii Mburu.
Image: EZEKIEL AMING'A

Kenya Revenue Authority is keen on the digital economy as it puts in place measures to tap more revenues and meet its financial year obligations.

This, as the country, moves to adopt a "Digital Economy Blueprint", a framework to improve Kenya’s and Africa’s ability to leapfrog economic growth.

The document is hinged on five pillars: digital government, digital business; infrastructure,innovation-driven entrepreneurship, and digital skills and values.

Through its Kenya School of Revenue Administration (KESRA), KRA has put focus on taxation of the digital economy, data analytics, and emerging economic blocs and their effect on tax and trade.

It is also keen on taxation of small enterprises, tax base expansion, leadership, ethics and integrity, which Commissioner-General Githii Mburu says are emerging areas that the country is grappling with.

He spoke on Friday during the 18th KESRA graduation.

This year, the school (KESRA) will train upwards of 6,000 KRA staff and 1,400 professionals in the private and public sector, Mburu said.

Last year, it trained 5,273 KRA staff and 1,300 professionals supporting KRA’s efforts in the areas of revenue mobilization, trade facilitation and border security.

This, as the taxman, continues with expanding the tax base with the inclusion of the informal sector, mainly small and medium enterprises.

It is also tackling tax evasion and illicit trade as it aims to surpass its current financial year’s ordinary revenue target of Sh1.78 trillion, as the economy recovers from the impact of the Covid-19 pandemic.

This is after surpassing the Sh1.652 trillion target for 2020/2021 with a surplus of Sh16.81 billion.

Last month, KRA collected Sh154.4 billion against a target of Sh142.2 billion.

The authority commenced the new financial year on an upward trajectory after surpassing its July-September target of Sh461.7 billion by Sh15.1 billion, a 30 growth.

 This implies that cumulatively, KRA realised collections of Sh631.1billion for the period July-October against a target of Sh603.9 billion, translating to a performance rate of 104.5 per cent, a growth of 28.3 per cent and a surplus of Sh27 billion.

Major collection came from domestic taxes where KRA netted Sh96.6 billion against a target of Sh90.700 billion, customs duty Sh57.374 billion against a target of Sh51.200 billion and PAYE collections of Sh37 billion against a target of Sh36.462 billion.

“The sustained strong performance is a reflection of the improving global economic environment as well as the implementation of revenue enhancement initiatives by the authority,” Mburu said.

Meanwhile, Interior CS Fred Matiang’i has called on both government entities and corporates to remain duty-bound to paying taxes on a timely and complete basis.

“I take note that a number of Government agencies have had tax compliance challenges and I urge them to lead from the front by paying their due share of taxes,” Matiang’i said.

.He has urged agencies to take advantage of the programs offered by KESRA to train their personnel, including board members, CEOs, heads of finance, HR and procurement on the mechanisms of staying compliant.

“This will reduce their exposure to tax penalties and unnecessary frictions with KRA,” the CS said.