New tax measures target directors of defaulting companies
Grant Thornton's chief operating officer Kunal Ajmera (right) with director Samuel Mwaura (centre) and senior associate Mbiki Kamanjiri during a media breakfast exploring implications of new tax laws, May 19, 2016. PHOTO | DIANA NGILA | NATION MEDIA GROUP.
What you need to know:
- Government planning to introduce new tax measures that will enable KRA expand its tax base and access more client information.
- Mr Mbiki Kamanjiri of tax advisory firm Grant Thorton says key features in the upcoming Finance Act 2016 will include provisions on tax avoidance.
- He says the new law will also lift the corporate veil that will allow the taxman to go after directors of defaulting firms.
Kenya is planning to introduce new tax measures that will see the Kenya Revenue Authority (KRA) expand its tax base and access more client information through its business intelligence system.
Mr Mbiki Kamanjiri of tax advisory firm Grant Thorton says key features in the upcoming Finance Act 2016 will include provisions on tax avoidance.
The new law will also lift the corporate veil that will allow the taxman to go after directors of defaulting firms.
Kenya has signed two international pacts this year that will see it share information with other global stakeholders to tackle tax avoidance.
The pacts include the Organisation for Economic Co-operation and Development (OECD) Convention on Mutual Administrative Assistance and the Common Reporting Standards.
THIRD-PARTY DATA
KRA is seeking to use third-party data, including mobile money platforms like M-Pesa, to tap into the systems for more information on taxpayers.
However, KRA points out that that even as the taxman was coming up with policies for raising taxation, it is aware that businesses need to grow.
“We need to see businesses grow otherwise they will result in low corporate taxes and we will not achieve our projections,” KRA's Domestic Taxes department manager for regional coordination Ezekiel Obura said .
