KRA registers 4 per cent rise in tax revenues to Sh1 trillion
KRA commissioner-general John Njiraini. KRA is to be reorganised into two semi-autonomous but interdependent agencies — the Inland Revenue Agency and Customs and Border Protection Agency. PHOTO | FILE | NATION MEDIA GROUP
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(KRA had increased its audits of firms to catch tax cheats and increase collections, the Treasury said in a statement.
KRA said it had intensified audits on corporate firms during the fiscal year, having discovered over Sh25 billion in potential taxes from about 60 international companies that had from 2008 used transfer pricing to declare losses when they had made profits.
Kenya collected Sh1.001 trillion ($10 billion) in the fiscal year to end-June, a 3.86 per cent increase from the previous year, the Treasury said on Wednesday.
The government aims to increase tax collections to fund several infrastructure projects, including a new railway, and pay for new local administrative structures created in 2013 under a devolved system of government to try to hasten rural development.
Analysts however say the government's efforts to raise more taxes have been curbed by a low level of tax compliance with unscrupulous businesses and individuals using all sorts of tricks to dodge taxes.
The Kenya Revenue Authority (KRA) had increased its audits of firms to catch tax cheats and increase collections, the Treasury said in a statement.
KRA said it had intensified audits on corporate firms during the fiscal year, having discovered over Sh25 billion in potential taxes from about 60 international companies that had from 2008 used transfer pricing to declare losses when they had made profits.
Transfer pricing happens when multinationals sell to their parent or subsidiaries abroad at lower prices leading to declaration of lower earnings or even losses, avoiding the payment of billions in tax revenues, KRA said.
-Reuters-
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