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Big brother now watching mobile money transfers

Fred Aminga @faminga

The taxman has moved to deepen tax collection by tapping information on mobile phones money transactions to assess compliance in filing returns.

This is part of a raft of measures in Kenya Revenue Authority’s (KRA) tax base expansion strategy meant to use information technology to mine data from various sources.

Speaking yesterday during the launch of the 2018 taxpayers month, KRA Commissioner General John Njiraini said the law provides for KRA to access such information from banks and institutions such membership bodies for professionals.

“Mobile data is a huge source of information for us,” he said, even as it emerged that banks have started sending demand letters asking customers to update their personal identification numbers (PIN).

KRA’s move essentially taps a huge pool of funds that change hands daily through mobile phones.

According to Communications Authority of Kenya, as at December 31,  last year, 607.4 million mobile money transfer transactions valued at Sh1.763 trillion were realised. The value of person-to-person transfers amounted to Sh596.4 million.

Mobile money data will be processed in conjunction with Kenya’s six mobile money services including Safaricom’s M-pesa, Airtel money, Equitel Money, Mobikash, Mobile Pay and T-Kash.

Tapping data

Through this initiative, KRA expects to net an extra 500,000 taxpayers and raise Sh60 billion alongside other efforts which include tapping data from professional bodies and even list of suppliers to the national and county governments to enable the taxman net those who may not have been paying taxes.

“Apart from mobile payments, some of the databases we have also targeted in the first stages include those maintained by regulatory and professional bodies such as National Construction Authority,” he said, adding that using information technology will loop in more people from the informal sector especially non-fillers of tax returns, hospital service providers and landlords.

He said that indications are that about Sh10 billion is expected to be tapped from residential and commercial projects countrywide. Treasury Cabinet Secretary Henry Rotich who presided over the event said that his Budget Statement had provided for amendments to the excise duty Act, Tax Procedure Act, KRA Act and Stamp Duty Act among a raft of measures aimed at expanding the tax base.

Tax Act

“We are also set to overhaul the Income Tax Act which is currently at the AG’s office. This is informed by the need to modify the Act and incorporate international practices,” he said.

Rotich said the new tax measures and administration issues have come into play to enhance collections by expanding the tax base to enable the Big Four agenda and raise tax compliance. He said he is increasingly focusing on taxation of international transactions and transfer pricing.

The new tax initiatives are meant to increase funding to the government as Kenya plans to fund an ambitious Sh3.07 trillion budget against dwindling tax revenues.

KRA missed its 2017/2018 financial year revenue target by Sh172.4 billion according to the full year’s economic and budget review.

A review tabled in Parliament earlier this year said the taxman collected Sh1.48 trillion in the year ending June 2018 against a target of Sh1.65 trillion.

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