Manufacturers get boost from KRA’s Sh5.7bn tax refunds
The Kenya Revenue Authority (KRA) has paid out Sh5.7 billion in value added tax (VAT) refunds owed to manufacturers since June, handing a major boost to companies that had their cash locked in for months.
The amount is nearly half of the estimated Sh11.1 billion backlog that had accrued as at June.
Manufacturers were owed Sh19.3 billion in refund claims at the end of 2013.
“Out of close to 80 per cent of the Sh7.1 billion the Treasury disbursed to KRA in June this year for VAT refunds has been paid out.
“We are committed to facilitating the rest of about Sh4 billion or so remaining to ensure that the manufacturers are supported to grow their businesses and pay more tax because we need it as a government to deal with challenges including youth unemployment,” said Treasury secretary Henry Rotich at the launch of the taxpayers month.
The taxman also plans to use the month-long event to endear itself to taxpayers and encourage voluntary compliance which is crucial for meeting revenue collection targets.
Commissioner-general John Njiraini said KRA aims to switch to completely paperless operations by 2018.
“We are in continuous stakeholder engagements at various levels and we have redefined our approach in tax administration and our focus now is to build tax payer trust through facilitation and not the old hard-tackle tactics which were neither beneficial to tax payers nor to us.
“Our staff are also being taken through an attitude and culture change programme to this effect. I hope Kenyans take advantage of this taxpayers month to engage them appropriately at our various centres,” said Mr Njiraini.
The Kenya Association of Manufacturers recently gave the taxman a trophy for its initiatives to clear the backlog as well as make tax compliance convenient through i-Tax (the online filling system). Last year, the system collected Sh600.8 billion as more than 3.5 million people registered on it.
The change in approach “from confrontation to facilitation” will now see tax disputes settled outside litigation as field officers’ mandate restructured by removing audit type activities from their day to day operations and shifted to tax education, taxpayer recruitment and technical support for those encountering challenges of any kind including legal or technological.
The recognition season, which started as a day event in 2003 and later became a weeklong exercise, will this month involve KRA commissioners visiting taxpayers, a ‘good morning coffee’ served by the commissioner-general at major roundabouts as well as awards to the best taxpayers at a gala dinner on October 21.
The KRA narrowly missed 2015/2016 target by Sh6.5 billion, registering a total tax collection of 1.21 trillion against a target of Sh1.217 trillion as tax collection increased 13.2 per cent from the Sh1.182 trillion collected in the 2014/2015.
