KRA seeks consultancy to rev up revenue collection

The Kenya Revenue Authority (KRA) is engaging a consultancy to help improve tax collection in the wake of missed targets.

The taxman said the consultant would help expand the taxpayer base and support revenue enhancement initiatives.

“The consultants must familiarise themselves with local conditions and take them into account in preparing their proposals,” KRA said in a call for bids by interested experts, to be lodged by April 25.

The KRA is grappling with ways of growing its collections amid massive shortfalls that have interrupted budgetary plans. Fresh data by the Treasury shows the KRA is likely to miss its full-year collection targets after realising Sh687 billion, with just four months to the end of the current budget window.

READ: KRA set to miss Treasury’s Sh1.2trn tax collection target

Collection in the eight months to February left the tax man with a deficit of Sh527.88 billion against a target of Sh1.21 billion for the year to June, cementing a run of upsets in successive quarters.

It missed its half-year tax collection targets by a substantial Sh47.6 billion, with the Treasury indicating that the shortfall mainly arose from a dip in payroll taxes and delayed application of the Excise Duty Act 2015.

The Treasury said by the end of December 2015 there was a huge shortfall in ordinary revenue collection made of a Sh26 billion deficit in Pay-As-You-Earn (PAYE) revenue and a Sh15.9 billion shortfall in Value Added Tax (VAT) collection from imports.

In an attempt to improve its performance, the KRA has recently undertaken diverse reforms, including the introduction of the iTax that allows for convenient electronic filing of returns from the comfort of one’s home or office, avoiding strenuous physical paperwork.

Further, the taxman established support networks for the iTax system across the various Huduma Centres countrywide to woo more tax payers.

Commissioner General John Njiraini in October said KRA was considering integrating more small and micro-entrepreneurs into the tax base by fast tracking absorption during licensing by county governments.

The move, he said, would net business people when paying for registration or renewal of licences and help deepen the tax base.

The KRA targets to raise the number of active Kenya taxpayers to four million by 2017-2018 against current estimated 1.6 million. The taxman in a strategic plan for 2015/16-2017/18 sets revenue enhancement as a goal and says it would leverage technology to facilitate taxpayer base expansion and improve detection capacity and enhance tax dispute resolution to improve collection.

The KRA also hopes to conduct more public fairs to try and strike a rapport with taxpayers and make them actively file returns. Electronic tracking of customs goods also ranks highly in KRA’s plans, with its management hoping to attain 100 per cent coverage by 2018 from present 23 per cent.

The Electronic Cargo Tracking System (ECTS) comprises satellites, a monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time.

The system triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container.