KRA gets Sh10bn to nail tax cheats

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The Kenya Revenue Authority (KRA) is about for a further Sh10 billion budget allocation to spice up identification and capture of made tax cheats in what promises to be the most important crackdown yet on high-net-worth individuals and firms.

The allocations follow recommendations by the National Assembly committee to review the law and allocate KRA a minimum of two percent of the taxes it collects to accentuate revenue collection.

This will raise the taxman’s budget to Sh32 billion given it’s expected to gather Sh1.6 trillion this year.

The Treasury had budgeted to allocate KRA Sh21.3 billion within the year starting July, up from Sh20.8 billion it came the present year.

The additional funds will give the KRA more muscle in its fight against tax cheats, allowing it to accumulate equipment and hire more staff, especially enforcement and compliance workers.

The KRA seeks to rent 1,000 workers who are going to be investigating rich people’s sources of income and expenditure against their tax remittances.

Some will work on intelligence reports to hunt recovery of unpaid taxes with the extra staff being given a target of raising billions of shillings within the new fiscal year .

Amendments to the Finance Bill by the National Assembly’s committee have recommended changes to the KRA Act to state that the allocation should be “at least two percent of the revenue actually collected by the Authority within the previous financial year”, but also that it shouldn’t exceed this percent

age. The law currently states that the allocation shouldn’t exceed two percent, without assigning a floor, resulting in the taxman getting about 1.5 percent of the revenue collected the previous year.

The same parameters will apply when the KRA collects revenue on behalf of county governments, which can open another revenue stream for the agency. “The amendment is to make sure that the KRA is allocated a minimum of two percent of the revenue collected within the previous fiscal year ,” said the committee within the report tabled on Thursday.

“The amendment also provides that the KRA may receive a commission of less than two percent of the revenue collected on behalf of a county government which this could form a part of the funds of the authority.”

MPs will in the week vote on the recommendations of the House committee before the President signs the new Finance Bill into law before Dominion Day

The KRA has been seeking additional funds over the years to reinforce its capacity to gather revenue amid ever-rising targets that haven’t been met for a few time.

The agency has been intensifying its crackdown on tax cheats using various databases, including bank statements, import records, automobile registration details, Kenya Power records, water bills and data from the Kenya Civil Aviation Authority (KCCA), which reveals individuals who own assets like aircraft. Total Words: 462

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