KRA shocker that will compel tax compliance

If you evade tax, things may be hard for you in future.

Kenya revenue authority has come up with stringent strategies that would ensure punitive measures for tax evaders.

Appearing before the National Assembly Finance and Planning committee, Kenya Revenue Authority (KRA) Commissioner General John Njiraini tabled the proposals, which have been sent to Treasury for consideration.

Those targeted are digital money platforms, members of professional associations, gamblers and service oriented businesses that do not remit income tax.

Tax defaulters have not been spared with a radical proposal that could see them listed with the Credit Reference Bureau (CRB).

This means that such defaulters will not access credit facilities and other financial services until they meet their tax obligations.

“The issue of remitting taxes has become a challenge. We want KRA to be allowed to list non-taxpayers with CRB,” Njiraini said.

Digital platforms in KRA’s cross hairs include online businesses, which, unlike traditional enterprises, are not easily visible to the taxman.

“Most money transactions are done on digital platforms. There is need for more clarity in the law on how these transactions can be taxed,” KRA said in its proposals.

“This is to ensure that we fully capture the sector. We propose provisions to support taxation and collection of tax from economic activities carried over digital platforms.”

Betting companies, already up in arms over a high tax regime, will be slapped with a 10 per cent exercise duty should the proposals be accepted by Treasury.

Mr Njiraini told the committee that the taxes already levied on the companies are inadequate, and there is need for a tougher taxation regime.

“Betting and other related activities have negative effects. The taxes currently being levied are not adequate,” Njiraini told the House team chaired by Joseph Limo (Kipkelion East).

KRA also intends to levy income tax on service providers that are currently out of the tax bracket.

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