Road licence income sparks blame game
Posted Tuesday, July 24 2012 at 22:02
- Treasury assumed KRA was collecting money yet is wasn’t, claims the taxman
The Ministry of Finance is on the spot over road transport licences revenue complaints from the Ministry of Transport and the Kenya Revenue Authority.
According to the Ministry of Transport, road licences are expensive to administer and easy to forge, whereas KRA says it thinks the Treasury assumed it is collecting road licence fees when making its revenue collection projections for last year, yet it wasn’t.
In its revenue collection projections for the year 2011/12, Treasury expected to collect Sh5.6 billion from the Road Transport Department although KRA revenue collection reports indicated a 107 per cent shortfall raising only Sh2.7 billion.
“This is what happened in 2008 when Treasury gave us similar forecasts without telling us the formula they had used to calculate the projections or any changes to the transport sector,” the revenue authority said on Tuesday.
Commissioner-general John Njiraini said they had raised the issue with the Treasury, but were yet to receive a response.
The taxman said that the Treasury is yet to reintroduce a road transport licence fee that was scrapped in 2008 on grounds of forgery and high administration costs, saying, there is no rationale behind such an increase in forecasts from RTD fees.
In his Budget Statement, Finance Minister Njeru Githae proposed to reinstate motor vehicle road licence at no cost for the government to ensure only vehicles that are legitimately owned are allowed on the roads.
Missing the target
The Transport ministry has, however, said it only requested for zero-rating on protective gear for motorists and cyclists.
The Treasury had forecasted that the taxman would raise Sh4.2 billion in 2009 although it managed Sh2.5 billion, missing the target by 40.1 per cent.
According to Mr Douglas Kaunda, the personal assistant to Transport permanent secretary Cyrus Njiru, there was a high incidence of forgery, at times making government licences look inferior to fake ones.
The Ministry of Finance has said that the matter can only be handled by Mr Henry Rotich, deputy director of economic affairs at the Treasury, who is currently on official assignments in Rwanda.