KRA reaches out to former employees
Major tax administration reforms are expected after Kenya Revenue Authority (KRA) Commissioner General John Njiraini was made to cut short the release of quarter one performance on Monday following a call from State House.
KRA has already moved to deepen its capacity by inviting former employees to boost its capacity after the agency fell behind in tax collection targets.
While what transpired during the meeting with the President remained scanty, it has emerged that a cash crunch that has adversely affected the government’s ability to meet some of its financial obligations, which was occasioned by tax collection shortfall was on the agenda.
As President Uhuru Kenyatta meets with Njiraini today for the Annual Taxpayers’ Day – an event held every year to celebrate taxpayers in the country – challenges that led to recent revenue shortfall are expected to come be on the agenda.
The move to engage former employees will deepen staffing levels by enforcing jurisdiction with knowledgeable officers to help the agency execute its mandate, and to collect the much-needed revenue to meet it’s collection target which is less Shs 10 billion.
“KRA wishes to engage its former staff who may harbour interest in exploring fresh career opportunities with us,” read the notice issued yesterday. This is part of a raft of measures expected to turn around KRA’s dwindling fortunes.
Instructive to note is the fact that while the tax collector is targeting former staff who were trained in core tax administration duties, however, KRA emphasises that these officials must be under the age of 40 and must have left its employment voluntarily and in good standing.
Given the age ceiling, indications are that most of those being targeted include those who joined the private sector, most of whom set up consultancies and while others were employed by tax consultancies.
The move provides KRA with a lifeline to spread knowledgeable officers throughout the country to target new revenue streams and defaulters.
Last Thursday, Cabinet Secretary Henry Rotich indicated during a grilling session by the National Assembly budget committee that to increase revenue, a new audit governance framework which is already in place will target among others transfer pricing, construction sector and tax compliance for retailers and wholesalers.
The ‘recalled’ officers are expected to target 225,000 landlords and bring them into the tax base following revelations that despite a boom in the construction sector there are only 25,000 landlords paying taxes out of a possible 250,000.
Speaking during a tax summit in Nairobi last week, Vivo Energy Kenya Managing Director Polycarp Igathe urged KRA to rope in the informal sector into the tax basket. “Focus on the baker of the national cake, even the informal baker in tax administration” he said.
Richard Ng’ang’a, a tax partner at KPMG East Africa, also urged Kenyans to take paying taxes as a social collaboration with the State. “There should be some flat transaction taxes so as to ease tax administration and make it easy for business to transact,” he said.
