KRA Targets to Expand Tax Base to 7 Million by 2021

The Kenya Revenue Authority (KRA) is working on have increased its tax base to 7 million from the current 3,9 million by 2021 through its 2019 to 2021 7^th corporate plan.

The move to expand KRA’s tax base means that the authority will have to collect more revenue from taxpayers so as to achieve the set target within the stipulated period.

KRA’s Commissioner in charge of Strategy and Risk Management Mohammed Omar disclosed that plans are in place to enlist more active taxpayers noting that they are seeking to expand the revenue to GDP to 19.2 by 2021 from the current 18.3 percent which was achieved at the end of the 6^th corporate plan.

According to Omar, the 6^th corporate plan significantly contributed to the growth of GDP after an increase in the taxpayer’s base which allows the country to collect more revenue for development from Kenyans.

Speaking in Kisumu during a regional sensitization meeting on the three years plan, Omar said the tax burden must be shared among Kenyans.

Ruth Wachira head of domestic taxes announced said that KRA has laid down infrastructure to ensure compliance in payment of tax adding that the authority has the capacity to collect revenue for the national and county governments should the responsibility be handed over to them.

KRA plans to visit six regions in the country to sensitize the public on the strategic direction of the plan.

Last month, it was disclosed that the taxman could miss its revenue target for 2018/19 financial year by nearly 300 billion shillings if the current collection trend persists even after revising the target for this fiscal year by 5.03 percent to 1.605 trillion shillings from 1.69 trillion shillings.

The new target is contained in the Treasury’s Statement of Actual Revenues and Net Exchequer Issues published in the Kenya Gazette though there were no reasons given for the revenue readjustment.

The International Monetary Fund last October said Kenya’s fiscal adjustment would help put the public debt ratio on a downward path, blamed over-ambitious budgets for growing public debt.

In October 2018, the National Treasury attributed the downward revision in revenue targets to amendments in the Finance Act 2018 which resulted in a reduction in projected revenues by 48.6 billion shillings.

KRA managed to collect 555.65 billion shillings in five months to November, averaging 111.1 billion shillings per month.

This means, 1.33 trillion shillings will be collected the whole year if the trend persists, falling below the target that has been revised twice in the year so far.

Last fiscal year, 1.37 trillion shillings was collected, missing the 1.415 trillion shillings target that had also been revised twice.

Treasury has also revised its total revenue target for the year from 2.629 trillion shillings to 2.582 trillion shillings, collecting a total of 857.281 billion shillings in five months.

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