Taxpayers queue to file their returns in Nairobi on the deadline last
month: The KRA says 1.7 million Kenyans responded to the call to file
the 2015 income tax returns through iTax. PHOTO | JEFF ANGOTE
By OBED NYAMBEGO
In Summary
Kenya is increasingly being identified as a
trailblazer in embracing and using of technology ranging from
individuals, households, businesses and government entities.
The Kenya Revenue Authority (KRA) has in the recent past
employed technology to deliver its core mandate of tax administration,
which includes mobilising tax revenue to fund government programmes.
Since the inception of KRA, revenue collection has
continued to grow while professionalism in revenue administration has
been enhanced. However, the journey has not been without its own
challenges which have slowed down the achievement of a fully integrated
and modern tax administration.
One way of dealing with these challenges was
through reforms and modernisation initiatives under the umbrella Revenue
Administration Reform and Modernisation Programme (RARMP).
Many positive developments have been achieved with
the implementation of the RARMP. Key achievements includes the
implementation of iTax that has enhanced domestic tax administration and
offers a wide range of online tax services.
The iTax platform was rolled out in 2014 starting
with PAYE, VAT withholding taxes and finally corporate income tax and
this enabled taxpayers to pay domestic taxes and file tax returns
online.
The platform allows taxpayers or their agents to
electronically apply for registration of taxpayers and obtain a personal
identification number (PIN), generate payment registration numbers (PRN
e-slips), file tax returns, view KRA tax ledgers, including checking
the status of payments and returns filed and apply for tax compliance
certificates and tax refunds online.
Therefore, it is no surprise that the KRA recently
won the Adam Smith Award in the category of Treasury Solutions in Africa
in June, 2016. The award is universally recognised as the ultimate
industry benchmark in treasury excellence.
Winners are selected for innovation, great
strategy, collaboration, implementation and quantifiable results in the
form of cost savings and return on investments. The KRA was recognised
for their introduction of digitised tax collection processes which have
enhanced efficiency, reduced transaction costs and brought added service
value to taxpayers.
According to the KRA, 1.7 million Kenyans responded to the call to file the 2015 income tax returns through iTax.
According to the KRA, 1.7 million Kenyans responded to the call to file the 2015 income tax returns through iTax.
With all these returns held online, the KRA now has a rich mine of data about taxpayers transactions at its disposal.
How this data will be used by the tax authority remains an open ended question. Nevertheless, taxpayers should now be wary, especially those who have not been fully disclosing their income and paying taxes thereon that the KRA could soon catch up with them.
How this data will be used by the tax authority remains an open ended question. Nevertheless, taxpayers should now be wary, especially those who have not been fully disclosing their income and paying taxes thereon that the KRA could soon catch up with them.
Despite the above positive developments,
implementation and use of iTax has not been without challenges. Some
include omissions and errors on migration of data from the previous
systems to iTax.
The platform does not automatically deal with tax
overpayments and withholding taxes arising from previous periods that
were paid outside the iTax system to enable taxpayers offset these
against their tax liability. This is compounded by the slow process of
correcting such errors which requires taxpayers to deal with both their
station office and the iTax team.
READ: Treasury bursts local borrowing target by Sh49bn on tax shortfall
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