An officer sorts Huduma cards at the National Registration Bureau in Nyeri town on April 28, 2021. PHOTO | JOSEPH KANYI | NMG
The Kenya Revenue Authority (KRA) wants Parliament to amend the Huduma Namba Bill to allow it access data in the race to nab tax cheats.
The taxman wants the proposed law to include access to data that is beyond acquisition of legal information like identity cards (IDs) or passports.
This access will allow the taxman to capture individuals who are above 18 years who are not paying their fair share of taxes at the moment.
The Huduma Namba card ID holders will automatically be listed as taxpayers once they attain the age of 18 years and be required to pay taxes.
The State is seeking to net individuals who have evaded paying taxes by requiring that the Huduma Namba serves as KRA personal identification number (PIN).
The number of taxpayers who filed returns in the year to June were 5.5 million while official data shows that Kenyans above 18 years are 25.64 million.
"Huduma Namba assigned to an individual under the Huduma Act, 2021 shall serve as PIN for the purpose of tax law," the Bill states.
MPs have proposed further changes to the biometric identification scheme or Huduma Namba which will replace the KRA PIN in changes to the law that are designed to check tax cheats.
The KRA wants Parliament to amend the government-backed Huduma Namba Bill, 2021 which amends the Tax Procedure Act to make biometric ID the key number for identifying taxpayers.
The changes will allow the KRA to access foundational data which includes personal data of a resident individual for attesting the individual’s identity and includes biometric data and biographical data.
KRA told the National Assembly’s Committee on Administration and National Security to review section 5(1)(3)(c) to enable the National Integrated Identity Management System (NIIMS) database to support the issuance of functional administrative information identifier.
“This will enable agencies to deal with specific administrative issues in their operations, for example, tax base expansion by KRA,” the authority said in submissions to Parliament.
All adults will be required to register with the KRA, offering the taxman a larger pool of people than the 5.5 million that it has netted through the returns.
Filing tax returns has emerged as one of the taxman’s preferred ways to net tax cheats and grow the income tax segments amid struggles to meet collection targets.
The State is seeking to net individuals who have evaded paying taxes by requiring that the Huduma Namba serves as KRA personal identification number (PIN).
The number of taxpayers who filed returns in the year to June were 5.5 million while official data shows that Kenyans above 18 years are 25.64 million.
This means that children offered the Huduma Namba ID will automatically be listed as taxpayers once they attain 18 years and will be required to file returns annually irrespective of their income status.
It also means that all adults will be required to register with the KRA, offering the taxman a larger pool of people than the 5.5 million that it has netted through the returns.
Filing tax returns has emerged as one of the taxman’s preferred ways to net tax cheats and grow the income tax segments amid struggles to meet collection targets.
If it sails through, the KRA will be required to activate the tax obligation of every citizen above the age of 18 years who is not registered as a taxpayer.
The law requires anyone with a PIN to file tax returns irrespective of their employment status.
Children who have enrolled into the NIIMS or Huduma Namba will by default be registered as a taxpayer upon hitting 18 years.
The Bill requires that upon enrolment of a newborn or any other child, a certificate of birth containing Huduma Namba shall be generated from the NIIMS database.
Kenyan adults will need this new ID to access government services, such as getting treatment at State hospitals, marrying or filing tax returns.
emutai@ke.nationmedia.com
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