Opinion and Analysis
KRA move to track down rich tax cheats
Posted Thursday, August 9 2012 at 20:27
It has been an open secret in Kenya for years that the Kenya Revenue Authority (KRA) is under-collecting revenue, despite the brisk pace of tax growth in the past decade.
Indeed, formal employees have virtually become slaves—overtaxed by the State and exploited by the non-taxpaying rich.
We accept the fact that KRA has taken measures to secure the Kenya tax base, which happens to be the best administered in the region going by tax yields.
The authority has put in place administrative measures and systems that have made tax dodging ever harder.
Again, owing to the admittedly good support given by the Kibaki Administration, rich tax dodgers are having a rougher time than before.
There has been little shelter offered to such characters at the top. However, this is hardly enough.
Our story on Thursday that only 100 people were placed in the Sh44 million top bracket tax pay threshold makes for depressed reading.
Apparently, annual income for the top 100 stood at Sh77 million translating into Sh6.4 million monthly. We know that is not correct.
In all probability, the group represents a coterie of CEOs and State suppliers who have little way of wriggling out of the tax net.
As KRA observes, the opulence we are seeing in the country—luxury cars, top-end exclusive houses and large pieces of land moving off the shelf at the brink of the eye—tells a different story.
Sources of this cash, apart from the drug business, which latest reports suggest is done with high level connivance, fraud and piracy, is not hard to determine.
The construction boom has created a lot of millionaires who are building and selling houses with huge mark-ups.
Besides, land speculators have made a killing as prime land shrinks and wealth levels rise progressively.
Besides that, there are a lot of suppliers in the booming informal sectors like second-hand motor vehicles and building material sellers who are easily avoiding paying taxes while taking a heavy toll on the infrastructure paid for by long suffering employees.
Even as KRA goes for landlords, who are some of the worst offenders, it should move on the big fish in the areas we have mentioned.
Truth be told, quite a number of these characters are easy to catch if KRA officials were to stop taking bribes from them.
In this regard we ask KRA to look inside Times Tower to seal leakages.
But with the economy growing formal by the day, let them nab the big fish and rescue Kenya from poverty.