KRA and KEPSA sign agreement to ease tax burden

In Summary

• The Kenya Revenue Authority and the Kenya Private Sector Alliance (KEPSA) have signed a joint communique aimed at increasing revenue collection and expand the tax base without overburdening the current tax payers.

• Through the communique, the two institutions have agreed to condemn ultimate misuse of public money collected as tax obligations from Kenyan taxpayers through corruption.

The Times Towers which houses KRA heaquarters.
The Times Towers which houses KRA heaquarters.
Image: FILE

The Kenya Revenue Authority and Kenya Private Sector Alliance (KEPSA) have signed a joint communique aimed at increasing revenue collection and expanding the tax base without overburdening current taxpayers.

The 11 point communique further aims at establishing partnerships and improving compliance.

This will also enhance regional and cross-border trade competitiveness juxtaposed against emerging opportunities offered by ACFTA and newly negotiated agreements within other bilateral and multilateral bodies such as EAC, ECOWAS, COMESA.

KRA Commissioner General Githii Mburu on Thursday said the deal will create changes within the current tax regimes and structures to accommodate and support Small and Micro Enterprises development and growth.

According to the communique, the private sector has committed to support efforts to broaden the tax base and the integration of technological applications to facilitate tax compliance including the use of AI and block chain solutions.

Through the communique, the two institutions have agreed to condemn ultimate misuse of public money collected as tax obligations from Kenyan taxpayers through corruption.

The two in the deal have called upon the government and the relevant tax policy formulators to rethink on tax regime for Small and Medium Enterprises (SMEs) who are currently constrained and opting to evade tax obligations due to the high cost of compliance.

“We are urging the adoption of a win-win approach to tax enforcement based on taxpayers’ collaboration rather than coercion as such a model will promote tax payment and strengthen KRA’s capacity to meet its targets,” read part of the communique.

The documents sent to newsrooms indicate that the private sector has affirmed commitment to pay their fair share of the Sh1.843 trillion this year.

The document further said KRA and KEPSA regret that there are unscrupulous business persons who have invested heavily to ensure they do not pay a coin by evading tax and yet such businesses would like to compete with those who pay their tax.

“This is an unfair trade practice which requires decisive action by KRA to guarantee market competitiveness and a level playing field,” read in part.

As a result, KEPSA said they welcome KRA’s latest move to curb corruption as private sector players are entitled to zero-corruption service from the Authority.

Already, KRA has dismissed over 200 tax officers and arraigned more than 50 employees suspected of abetting tax evasion.

The document indicate that the private sector also affirms KRA’s commitment to create a conducive tax regime for business and stakeholder partnerships to foster tax compliance.

Private sector players reiterate commitment to partner with KRA in dealing with illicit trade, play our part in facilitating and improving trade competitiveness.