KRA to slap a Ksh 20,000 penalty on Tax cheats
Did you file your 2015/2016 taxes? Well, the Kenya Revenue Authority is stepping up its hunt for citizens and businessmen who missed the June 30, 2017, deadline. According to the Authority, individuals who failed to file their tax returns will have to pay a Ksh 20,000 fine. The drive, directed by treasury is aimed at plugging the annual tax shortfalls currently experienced by the KRA.
Tax collection for the first five months to November was short of target by Sh29.7 billion, mainly due to reduced economic activity on prolonged electioneering period and drought that hit agriculture.
“The Government is going to undertake a combination of policy and administrative reforms to bolster revenue yields going forward,” said the Treasury. “Some of the reforms will include expansion of tax base by targeting informal sector, betting lotteries and Gaming and pursue non-filers.”
According to data released by the KRA, 2.6 million Kenyans worked in the formal sector last year compared to 13.3 million in the informal sector.
KRA reported that 2.4 million workers and businesses filed their returns by end of June deadline, meaning thousands of businessmen and employees failed to do so. The country has been blamed for a small tax bracket that fails to capture the self-employed and those working in the informal sector.
To target non-compliant businesses which do business with the government, KRA will review data from the platform that links the government payment system to the online tax register, dubbed the iTax. According to Treasury, other measures will include data matching and use of third-party data to enhance compliance by integration of iTax with IFMIS.
In 2015, the Authority raised the penalty for failure to file returns to Sh20,000 from Sh1,000, with the enhanced fines took effect last year.
KRA will also be relying on the filings by companies revealing their suppliers and amount paid for their supplies in what last year led to the deactivation of more than 95,000 PIN accounts in a crackdown on tax cheats. A reduction in tax collection for the previous year has led to a reduced projected spending by the government from 1.704 trillion to 1.643 trillion. A 61.4 billion decrease.