Economy

KRA to hire 2000 officers in fight against tax cheats

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Times Tower building, headquarters of Kenya Revenue Authority. FILE PHOTO | NMG

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Summary

  • The Kenya Revenue Authority (KRA) will hire 2,000 more officers to bolster its pursuit of high net worth tax cheats amid pressure to meet its collection targets.
  • Parliament’s Finance and National Planning Committee directed Treasury to provide funds for the recruitment of the officers who sources said would mainly be deployed to investigate rich people’s sources of income and their expenditure against their tax remittances.

The Kenya Revenue Authority (KRA) will hire 2,000 more officers to bolster its pursuit of high net worth tax cheats amid pressure to meet its collection targets.

Parliament’s Finance and National Planning Committee directed Treasury to provide funds for the recruitment of the officers who sources said would mainly be deployed to investigate rich people’s sources of income and their expenditure against their tax remittances.

“The National Treasury should allocate additional funds under the Supplementary Estimates 1 to employ additional 2, 000 staff,” the committee says in a report tabled before Parliament, without specifying the amounts.

This came as the KRA Tuesday invited applications for senior positions in its investigations and enforcement department.

Among the positions the tax man targets filling are chief manager investigations, manager investigations, assistant manager investigations, assistant manager operations, data analysis and reporting, assistant manager prosecution and supervisor in-charge of investigations.

“KRA is seeking result-oriented, self-driven individuals with high integrity to fill the vacant positions” it said, setting a January 21 deadline for submission of applications.

The KRA last year disclosed that it intended to start posting staff at factories producing excise tax-covered goods such as beer, wines and spirits, cigarettes and juices as part of efforts to curb tax cheats.

The seconded officers will monitor the production of goods that attract excise tax right from the point of manufacture to seal revenue leakages.

The proposals are part of the Excise Duty Regulations 2020 that are currently before Parliament for scrutiny.

The KRA is racing to bring more people into the tax bracket and curb tax cheating and evasion in the quest to meet targets in an economy where the Covid-19 pandemic has battered collections.

The taxman missed its target for the five months to November last year by Sh100.72 billion compared with a similar period in 2019, reflecting the impact of Covid-19 economic hardships that triggered a fall in company earnings, layoffs and cuts on levies.

Treasury data shows that the KRA collected Sh527.73 billion in the July-November 2020 period, a 16.03 percent drop compared with Sh628.46 billion a year ago.

The revenue target for the year to June is Sh1.42 trillion after Treasury reduced it from Sh1.51 trillion in the wake of Covid-19.

The taxman has in recent times stepped up efforts to increase its staff count with focus on the intelligence and enforcement departments.

In November 2019, the KRA got Sh2 billion for hiring 1,000 intelligence and enforcement officers to identify and arrest wealthy tax cheats, setting the stage for an escalated crackdown on tax evasion.

The additional staff were tasked with investigating rich people’s sources of income and their expenditure against their tax remittances. Last year, the KRA said that the detectives had identified 1,309 firms and wealthy individuals that owe it Sh259 billion.

It has been intensifying its crackdown on tax cheats using various databases, including bank statements, import records, motor vehicle registration details, Kenya Power #ticker:KPLC records, water bills and data from the Kenya Civil Aviation Authority (KCCA), which reveals individuals who own assets such as aircraft.

The taxman has in the past two years also been seeking details of suppliers and contractors hired by county governments. This followed a steep increase in imports of the luxury goods and multi-million-shilling investments in real estate—an indication that some crooks could be evading payment of tax.

In January last year, the KRA advertised 31 senior positions in enforcement, border control and internal audit among other departments.

The new officials were meant to fill positions left vacant after the axing of some officials due to graft allegations while others had retired.

The KRA had in 2019 fired 75 employees, including senior managers, and handed them over to the police for theft, cheating in the declaration of returns, corruption, collusion and soliciting bribes from tax cheats.

Sixty-one of those fired and arrested were from the domestic taxes department and 14 from customs and border control.