It takes a Kenyan company 202 hours to file tax returns: survey

Models line up in a mock queue on Mombasa Road to demonstrate the frustration of filing tax returns manually during the launch of KRA’s online platform called iTax. PHOTO | SALATON NJAU |  NATION MEDIA GROUP

In Summary

• The result comes amid reforms by the Kenya Revenue Authority (KRA) meant to boost revenue collection which include introduction of iTax, an automated system for administration of domestic taxes.
• The survey revealed that low income economies showed the least reduction in time taken to comply and the number of taxes paid, regardless of the reforms, signalling presence of other challenges such as lack of modern communication infrastructure to aid tax administration.
• Tax is among the main concerns for businesses. A recent global survey carried out by PwC targeting chief executive officers showed that seven in ten CEOs were extremely concerned about the increasing tax levied on their businesses.

By IMMACULATE KARAMBU
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Kenya rose one position to 101 in the annual global survey by the World Bank and PwC that measures the number of taxes paid by companies and time taken to comply.

The latest edition of the Paying Taxes report indicates that on average, it takes a company in Kenya 202 hours to comply with its taxes which involve 30 payments.

The country is 35 per cent below the Africa average in terms of time taken by companies to be tax compliant and 18 per cent regarding the number of payments made.

The survey is built on the World Bank’s Ease of Doing Business Index which tells countries’ competitiveness as investment destinations.

The result comes amid reforms by the Kenya Revenue Authority (KRA) meant to boost revenue collection which include introduction of iTax, an automated system for administration of domestic taxes.

“Kenya has retained its competitive position in Africa. The Paying Taxes 2016 report is based on data for the year ended December 31, 2014 and therefore does not yet capture the impact of the electronic filling of tax returns through the iTax system which has simplified the process,” said Gareth Harrison, associate director for transfer pricing, tax consulting and strategy at PwC.

Electronic tax filing and payments were the most common tax reforms undertaken by countries across the globe last year.

The survey revealed that low income economies showed the least reduction in time taken to comply and the number of taxes paid, regardless of the reforms, signalling presence of other challenges such as lack of modern communication infrastructure to aid tax administration.

Tax is among the main concerns for businesses. A recent global survey carried out by PwC targeting chief executive officers showed that seven in ten CEOs were extremely concerned about the increasing tax levied on their businesses.

The Paying Taxes survey captures corporate income tax, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, among others.

Last year, the government introduced a railway development levy on all imported goods and re-introduced the capital gains tax to meet its revenue needs.

“Electronic filing continues to have a significant impact in easing the burden of tax administration. Going forward, we expect to see a more e