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Uhuru lays into KRA over missed revenue target

President Uhuru Kenyatta has urged Kenya Revenue Authority (KRA) to seal tax loopholes, leverage on technology and eradicate corruption to boost tax collection and ease pressure on government finances.

Speaking yesterday during the 2015 National Taxpayers Day in Nairobi, President Uhuru said to achieve optimum tax ratios, corruption within KRA must also stop.

“I am directing the National Treasury to work with the board of KRA to ensure speedy implementation of appropriate staff vetting framework and to do it correctly without any victimisation,” he said.

“These measures must not only include stringent punishment of corruption offences but also institution of a programme to vet staff who handle sensitive tax matters,” said Uhuru.

KRA, which reportedly had a shortfall of Sh10 billion in the last quarter, has forced Treasury Cabinet secretary Henry Rotich to institute a raft of measures to help it meets its Sh1.3 trillion tax target this financial year.

As part of the measures, Treasury will now monitor on a daily basis revenue collection and cargo clearance at the port of Mombasa. It will also monitor container freight services (CFS) to seal revenue loss loopholes.

This will include doing due diligence which had hitherto been ignored. Rotich said they will also improve stock management to fast track movement of cargo with the installation of CCTV cameras to monitor movement of cargo, especially at night.

He said that in the next one week, Treasury will install a hotline through which members of the public can report issues of concern. “We have also discussed with KRA a mechanism to audit lifestyles of KRA officials,” he said, adding that this is in line with best practices and chapter six of the Constitution.

“We have agreed with KRA to reduce leakages by first reviewing the administration of customs and VAT collection and this may involve working with a consultant,” said Rotich.

Auditing processes, especially on transfer pricing, construction companies and large taxes will also be improved. KRA commissioner-general John Njiraini said they have prioritised replacement of the Simba custom system with a more versatile platform that will help address intractable challenges, especially those associated with the exercise of discretion by staff.

“With the automation of key processes, including decisions on cargo valuation, we expect to see better revenue collection and more efficient trade facilitation,” he said. The authority also hopes to conclude the project once a pending court case challenging its implementation is resolved.

Eastern Produce Kenya Limited was declared the Taxpayer of the Year and best corporation tax yield large taxpayers in the 2014/15 financial year despite a dip in the agriculture sector during the year under review.

Best growth in corporation tax went to Basco Products while AutoXpress Limited was declared the importer of the year. The Best Corporation Tax SME Award went to Better Globe Forestry Ltd for having the highest corporation tax to turnover ratio.

Laikipia county government was awarded the County of the Year Award in relation to favourable VAT And PAYE collection against its expenditure in 2014/15.

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