Kenya Revenue Authority misses its nine months target
The Kenya Revenue Authority (KRA) collected Sh842.5 billion in the nine months to March 2016.However, the taxes were below the nine-month target of Sh911.6 billion by a significant Sh69 billion .This amounted to 11.7 % growth over the same period from the last fiscal year. The taxman is targeting a growth of 20.9 % collections for the whole financial year (2015/2016).
This was as a result of delays in the enactment of Excise Act which caused weak business performance undermining the performance of corporation tax.
He reported that they were geting report from Kenya Private sector Alliance(Kpsa) that things are not rosy but have hope that with reforms and a new law,the future is bright.
KRA Commissioner General John Njiraini said reforms instituted by the taxman will see more collections in the coming period.
Speaking during the release of result at Times Tower on Tuesday, Mr Njirani said there was consistently strong performance for VAT and domestic excise due to VAT tax base expansion through iTAX, V.A.T expansion and county mobilisation.
This is in addition to automation of which has helped combat illicit business. “The increase in domestic V.A.T is attributed to reforms, sealing of tax leakage loopholes, simplification of tax and review of the law which have eased the process,” he observed.
Domestic VAT was up 23.2 per cent against the 2015/2016 financial year target of 12.2 per cent while excise domestic tax was up 22.1 per cent against a target of 21.8 per cent. P.A.YE however dropped significantly from a yearly target of 19.3 per cent to 12 per cent in nine months, attributed to poor performance of the economy.
Banks are expected to pay their taxes this month. Mr Njiraini observed that the current trend of the performance of banks shows the economy is not doing well, coupled with increased layoffs by various companies. “If you see banks having problems in collecting loans, then it means the economy is not doing well,” said Njiraini.
“If the banking sector coughs, then we become worried. We know the reasons why banks are not doing well is the provision of huge non-performing loans but KRA has already send notifications to financial institutions on how they should file their profit,” he told the press.
The Commissioner General said the taxman is doing a lifestyle audit of its staff to weed out rogue ones, adding that KRA is the only Government institution whose top management have contracts measured against their performance.