Over 70,000 people have been filing their taxes through the Kenya Revenue Authority (KRA) online itax system. However, with the June 30 deadline it is not certain that it will meet its tax target of 1.5 trillion shillings to finance the FY2016/17.
For the past two weeks, long queues have been witnessed countrywide within the iTax Support Centers hat had been opened for extended hours to the public ahead of the deadline for filing the returns.
This is after many of them tried accessing the KRA online service but the servers seemed to be slow.
Though the revenue growth was low, KRA has stated that the 11.9 percent was solid considering the tough economic times that the country is experiencing.
However, the number of registered taxpayers increased by 37.5 percent from 1.6 million.
On the other hand, the government seems to have overestimated the country’s taxation, thus pushing KRA to find other alternatives of getting the set targets. The economy of the country continues to grow at a very slow rate but on the other hand, the National Treasury expects the revenue to grow faster.
Henry Rotich, CS Treasury during the tabling of the budget estimates for the FY2016/17 before parliament stated that they will be broadening the tax base.
“We must widen the tax net so that everyone eligible to pay tax, including the informal sector, pays tax. In this respect, I have asked the Kenya Revenue Authority explore ways of taxing the informal sector and to redouble their efforts in netting tax evaders.”
He added, “Indeed, if everybody pays their fair share of taxes, we would be in a better position to lower tax rates. As part of the review of the income tax, we are considering to introduce a presumptive tax for the hard-to-tax segment of our people including those in the informal sector.”
According to the records in March this year, KRA had missed its half-year revenue collection target by a total of 47.6 billion shillings. This led to Economic analysts foreseeing a huge budget deficit ahead with the economy being widely affected.
Last year, KRA failed to hit its target on two occasions, raising eyebrows among the public as well as the stakeholders with allegations of corruption surfacing among the officials. This forced President Uhuru Kenyatta to order a lifestyle audit to all KRA officials late last year.
According to the data at the treasury, the missed target by the Kenya Revenue Authority is a result of a huge shortfall in the ordinary revenue collection that resulted to a deficit of 26 billion shillings in Pay-As-You-Earn, being revenue collected from salaried individuals as well as 15.9 billion shillings off the Value Added Tax collection from mainly from the imported goods.
According to a report released, the total revenue collected including Appropriations-In-Aid totaled to 575.2 billion shillings against what KRA had set vs target of 642.9 billion shillings at the end of December 2015 giving a total of 67.7 billion shillings off the target.
Late last year, Kenya Revenue Authority missed its target by 28 billion shillings after it collected a total of 300 billion shillings against the target of 328 billion shillings.
KRA is already staring at a huge tax deficit this financial year. The budget deficit has been set at 9.3 percent of GDP however, due to its low absorption uptake, it expects it to drop to 6.9 percent.
Revenue statements from the Treasury show the taxman had raised Sh888 billion by the end of April against a target of Sh 1.2 trillion. To meet the target, the taxman will be required to collect more than Sh327 billion in two months. This is a long shot given its collections history.