KRA carrying out pilot tests on more efficient tax system

The taxman is banking on fully rolling out an online system for the administration of domestic taxes to expand revenue collection.

Set to be fully launched in June, the iTAX system has currently incorporated 120 companies, including large retail networks, which are filing their income and value added taxes online.

The system, according to KRA senior deputy marketing commissioner Kennedy Onyonyi, has had an overwhelming reception, with many companies seeking to be included in the pilot roll-out.

“We have had to restrict the numbers in the pilot phase because it was more than we had anticipated handling at this stage. This only means taxpayers are ready to embrace it,” said Mr Onyonyi.

Launched by President Kibaki on October 22, 2011 and implemented by Indian firm Tata, iTAX replaces the online system previously used by KRA, which the public has complained about over its inefficiencies.

The web-enabled system that seeks to make tax compliance a simple, quick and secure exercise is expected to bring down the cost of tax compliance in logistics, and help reduce interaction between staff and taxpayers, eliminating bribery claims.

Mr Onyonyi said this was part of KRA’s mission to attain global best practices in tax collection, and the taxman intended to benchmark against nations that have fully automated their systems, including the US.

iTAX is an improvement of a previous online system by KRA called the Integrated Tax Management System, rolled out in 2007, which failed to automate taxation and spawned serious customer dissatisfaction.

KRA says that most taxpayers are locked out by inefficiencies and bureaucratic systems hence iTAX.

With the new system, taxpayers will be able to register, file returns, make payments and enquire about their status, while monitoring their accounts in real-time 24 hours a day, from the comfort of their homes or offices.

The system will also eliminate rogue agents who swindle taxpayers by keeping outdated electronic registers of tax agents.

Mr Onyonyi said electronic filing will be based on Microsoft Office Excel program due to its simplicity and ability to capture large data.

“We did not want a new program that would necessitate training…anyone who is computer literate at least can work with Excel”, said Mr Onyonyi.

To further cut down the cost of taxation, taxpayers will be required to fill their returns offline by downloading the returns form, filling it and uploading it at their own convenience. The system is set to integrate more than 30 banks to ensure that most taxpayers are covered.