- KRA said the decision was made in consultation with the National Treasury.
- The taxman said the decision will take effect from February 25, 2023 and will be in force until further notice.
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The Kenya Revenue Authority has suspended all tax relief payments until further notice in a move aimed at sealing revenue leakages, days after a radical surgery at the authority.
In a statement, KRA said the decision was made in consultation with the National Treasury to enhance ongoing processes related to the payment of tax refunds, exemptions, waivers and abandonments.
The taxman said the decision will take effect from February 25, 2023 and will be in force until further notice.
The authority noted that over the past five years, KRA has granted tax reliefs and incentives totaling to Sh610 billion, with an average of Sh122 billion per year.
The move to suspend payment of tax reliefs allows KRA to audit and enhance the tax relief processes and procedures.
“KRA continues to comply with the law by assessing and processing the tax reliefs during this process,” KRA said in a statement signed by board chairperson Anthony Mwaura.
The decision means that all pending payments that were due will not be disbursed until the end of the process.
“The suspension of tax reliefs follows concerns from taxpayers, initiating the need to restructure rules and procedures governing tax exemptions,” Mwaura said.
KRA said the current suspension and ongoing review of tax reliefs is also aimed at increasing the impact of tax expenditure on economic growth.
This, KRA said, will be achieved through minimising tax expenditure and aligning it with international best practices for better internal revenue.
“KRA is optimistic that the enhancement of the tax relief process and procedures will offer a permissible issuance of tax exemptions; it will also ensure equitable processing of tax reliefs,” Mwaura said.
The improvement is part of the Kenya Kwanza government's strategy to seal revenue leakages and enable KRA to mobilise more taxes towards the country's economic growth.
It is also part of the aggressive revenue mobilisation plan aimed at enhancing revenue collection and redirecting resources to finance priority growth-supporting programmes.
“This move is aimed at powering the Bottom up Transformation Agenda,” the chairperson said.
KRA said it remains committed to provision of excellent customer service to taxpayers by working closely with taxpayers to resolve arising issues for ease of tax compliance.