KRA, utility firms plan digital records to catch tax cheats

 

ICT secretary Fred Matiang’i (left) and Kenya Revenue Authority commissioner-general John Njiraini address journalists during International Customs Day celebrations held at Times Towers in Nairobi on Monday. Photo/SALATON NJAU  

By GEOFFREY IRUNGU,

In Summary

• The register dubbed the National Spatial Data Infrastructure Programme will involve digitising State operations to accurately locate people, businesses and organisations, including landlords, who are required to pay taxes on rental income.
• The government is targeting tax collections of more than Sh1 trillion in the coming financial year but this may not be achieved in the face of widespread evasion.
• The programme is is intended to integrate data bases on land, vehicles, houses, companies, and other organisations 

State agencies are putting together a comprehensive register incorporating physical addresses of assets and their owners in the latest attempt to nab tax cheats, detect proceeds of crime and enhance security.

ICT secretary Fred Matiang’i said the register dubbed the National Spatial Data Infrastructure Programme would involve digitising State operations to accurately locate people, businesses and organisations, including landlords, who are required to pay taxes on rental income.

“Information is scattered in various government ministries or agencies as well as county governments. We want to have a register of all assets this country has, what individuals and organisations have and map out their locations,” said Dr Matiang’i during activities to mark this year’s International Customs Day in Nairobi.

The meeting was attended by Kenya Revenue Authority (KRA) staff and clearing and forwarding agents.

The government is targeting tax collections of more than Sh1 trillion in the coming financial year but this may not be achieved in the face of widespread evasion.

READ: Treasury sets record revenue collection target for KRA

Dr Matiang’i said the register would be compiled by collating data held by utility companies, pension funds, county governments, banks and insurance companies who are custodians of some of the assets.

Despite saying the compilation had begun, Dr Matiang’i could not say how long it would take or the kind of resources required.

However, work on the unified database comes two years after the KRA said it would map properties and land across the country to facilitate the collection of taxes on rental income which has proven difficult to enforce in the fragmented segment.

“We had proposed to do the digital mapping of properties across the country. But we realised it was not our core business and we also learnt that the ministry of ICT has embarked on the exercise,” KRA Commissioner-General John Njiraini said on Monday.

The programme is is intended to integrate data bases on land, vehicles, houses, companies, and other organisations.

Besides catching tax evaders, it could deter money laundering and financing of terrorism with illicit funds believed to be usually sanitised through property transactions.

Fears over terrorism have heightened in Kenya with incidents of grenade attacks believed to be launched by Al-Shabaab and Al-Qaeda fighters following the Kenya Defence Forces’ incursion into Somalia to secure national borders and the Indian Ocean waters from pirates.

The US banks and other international banks have in recent times been pressuring Kenyan banks to improve on their know-your-customer procedures to avoid being penalised by their home regulators for money laundered through their institutions.

READ: US banks reject Kenya cheques over terror rules