It’s three weeks now to the deadline for Kenyans to file their 2017 taxes. The Kenya Revenue Authority (KRA) has just launched a media campaign dubbed #iPayBecause to coincide with the last-minute Kenyans who wait right until just before the June 30 deadline to start filing.
KRA is ready, with extended hours at iTax and Huduma centres in different towns and with advertisements to show how easy it should be to file taxes on their online iTax platform. They also have cautioned taxpayers about late filings, which will attract a penalty of five per cent of the calculated tax, and late payments which attract a fine of 20 per cent of the outstanding tax.
But it is also a very bad period for KRA and the government, on whose behalf it collects taxes. While the government should be celebrating one year since the launch of the Madaraka Express passenger train service on the SGR, instead the latest round of scandals at the NYS and the NCPB are fresh in people’s mind. The blatant and brazen misuse of money collected has seen millions of taxpayer shillings flushed out from the government for non-delivery and over-priced delivery of staple foods like maize, and others like towels, indigenous trees, and car tyres.
Some of these were done in the name of enabling opportunities for women and youth-owned companies, but which now appear to have been orchestrated by tenderpreneurs and paper-pushing officials in different government offices.
The economy is also slow this year. People engage in investment and business activities based on perception, and the perception is things are not good. The news is negative; farmers have not been paid, malls are empty, people are falling sick, public servants are striking, properties have stalled, banks are not lending, national and county governments have been slow to pay pending bills, electricity is too expensive and supermarkets have closed. Here in Nairobi, many roads, including in the leafiest suburbs, are now full of potholes and our political-minded governor seems clueless. He lost his executive deputy and is now being babysat by a team of Cabinet secretaries from the national government, something he resents.
And even as there is public frustration at the government because of misuse of resources, the government has also taken the chance to finally review some old tax laws. There is an income tax laws amendment bill that will come before Parliament after its month-long recess ends, and once it is passed into law, it will affect the next financial year, and the taxes we will file in June 2019.
PROPOSOED NEW LAWS
The bill raises taxes on gambling, oil and gas, and e-commerce, as well as cracking down on transfer pricing by multinationals. It also cuts back on tax breaks for companies operating in export processing zones. It ropes in county governments in tax collection through their business permits and taxes on property sales, which will be quadrupled. Also, people who receive their foreign country pensions in Kenya will now face a new tax. And in a populist measure, high-salaried people who earn above Sh750,000 per month will now have a 35 per cent tax bracket, while the bill also has a tax cut for lower-income Kenyans as tax bands at the low end where people pay 10 per cent have been expanded.
Aside from the proposed new laws, KRA has harvested data and trends of taxpayers. It has picked out the PINs of inconsistent taxpayers and people who filed nil (zero) returns, and has levied fines while pursuing tax-evader and counterfeit-producing companies. And earlier this month, in a crackdown on immigration work permits, Kenya's Interior ministry tied the filing of PIN data with immigration. So if you have been living and working in this country but not paying your taxes, the government will now have a better picture of your employment activities and will be able to levy and collect appropriate income taxes from you.
There is also a tax amnesty for Kenyans who may have stashed assets abroad, to encourage them to bring them back with no penalty as long as they declare by June 30.