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January 22, 2019

Tax education to enhance compliance

Signboard to Shimoni KRA offices at the larger Kwale county .Photo Elkana Jacob
Signboard to Shimoni KRA offices at the larger Kwale county .Photo Elkana Jacob

A story is told of a fresh graduate who was shocked by the higher tax deductions he saw on his first payslip compared to his colleagues with a similar salary. He protested to his employer, only to be told that since he resided at the staff quarters, the house was considered a benefit hence subject to additional tax. The young man was crestfallen.

This apparent heartbreak could have been avoided had the young graduate been previously exposed to adequate tax education. But this was probably the case since the society views tax authorities with a measure of apprehension.

Over the years, as far back as during the Biblical times, enforcement has been used as a primary tool for driving the tax compliance agenda home in most tax administrations across the world. This probably explains why the tax collectors have never been the favourite public officers among the people in their jurisdictions.

According to a research done by the Griffith University in 2008 titled “Enforcing Tax Compliance: To Punish or Persuade?”, adoption ofenforcement over the facilitation model as a compliance driver has several serious shortcomings, the major one being the risk of undermining the relationship between tax authorities and the taxpayers. In the long-run, trust between them dissipates and gradually the relationship of the two parties borders that of adversaries.

Closer home, the Kenya Revenue Authority (KRA) has, for a long time, been an enforcement agency in the eyes of the taxpayers. However, in a bid to establish a better working relationship with the taxpayers anchored on trust, the tax agency has resorted to exploring other measures that promote voluntary compliance among the taxpayers. Taxpayer education is one such measure.

The KRA taxpayer education programme is founded on the need to bridge knowledge, attitude, perception and practice gaps among the taxpayers. To this end, KRA has been providing relevant information and training to taxpayers through sensitisation initiatives and raising public awareness on the social importance of paying taxes.

An old African adage has it that if you want the best from a tree in future, tend to it while still a seedling. It is for this reason that it is important to also look at the potential future taxpayers. Through the Schools Outreach and Tax Club programmes established in the year 2012, KRA has been able to reach out to over 700 schools dispersed across 43 counties countrywide. The idea is to inculcate the right attitude and a positive perception of tax and taxation in the young generation. If this is consistently done and accorded the necessary support, then the future taxpayer will be adequately prepared to fulfil their civil obligation of contributing to the national kitty through taxes when they finally get of age.

In 2016, KRA took taxpayer education to the next level. The University Tax Societies programme otherwise known as UTax, become an instant success in both our public and private universities. So far, students from 27 universities have been sensitised and proficiently trained to have basic operational knowledge on tax matters. Sustainability of the taxpayer education message in these institutions is through active tax societies run by student membership with minimum support from their institutions. These societies have organised training sessions as well as assisted staff, faculty and fellow students during the tax filing seasons. During the 2016 and 2017 annual tax returns filing season, members of university tax societies were at hand to assist taxpayers file their tax returns. Through this exposure, tax ambassadors and promoters are created while a few, after college, have gone ahead and found a niche to assist others at fee. They are also key ambassadors in delivering the tax message to those at the grassroots level.

It goes without saying that if one remains a hoarder of information, chances of the information effectively reaching the target audience are very slim. It is for this reason that one of the objectives of the tax societies and clubs is to equip society members with knowledge and skills to assist taxpayers meet their inalienable right and obligation to be tax compliant.

Taking this taxation information to the doorstep of the students is also very important as it has the potential to shape their career aspirations. This widens the horizon of students whose career aspiration lies in becoming tax experts. Additionally, better knowledge of tax issues can only be a better platform of inculcating a tax compliant-culture in the students from an early age.

We therefore call upon stakeholders to reach out to us in areas where they have a tax education gap.

(The Writer is the Deputy Commissioner in charge of Marketing and Communication at the Kenya Revenue Authority,[email protected])




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