Credit Reference Bureau (CRB), a name that many Kenyans are always scared of but one that hundreds of thousands cannot avoid to be part of.
Stats show that more than 500,000 Kenyans are listed on the CRB for defaulting in the payment of loans taken from various financial institutions including digital lenders.
More than 80 percent of those listed on CRB are young people who have rushed to take up instant loans via mobile loan apps where they have ended up defaulting.
Those listed on CRB are treated as ‘risk borrowers’ and cannot take a loan from any other financial institutions including from some of the digital lenders.
As hundreds of thousands of Kenyans struggle to unchain themselves from the fangs of CRB, the Kenya Revenue Authority (KRA) has dropped a bombshell, putting plans in place to blacklist tax defaulters on CRB.
The tax collector has been struggling with hitting revenue targets with the management attributing it to tax evasion among thousands of Kenyans. KRA failed to hit its revenue target in the last financial year by 55 billion shillings with the deficit set to double in the current year.
According to the outgoing KRA Commissioner John Njiraini, said that it is only through the listing on CRB of the “hardcore” debtors that KRA will be able to track them down.
If the proposal by KRA will be adopted, thousands of Kenyans will see their names handed over to CRB for blacklisting, further making life more difficult for them.
More Avenues to Tax Kenyans
On top of listing tax defaulters on CRB, Kenya Revenue Authority (KRA) has also proposed other revenue avenues that will see Kenyans and businesses pay more for their transactions.
KRA is now targeting online businesses, service providers and members of professional organizations that have not been paying income tax. KRA is also proposing an increase in taxes levied on gamblers.
“Most money transactions are done on digital platforms. There is a need for more clarity in the law on how these transactions can be taxed. This is to ensure that we fully capture the sector. We propose provisions to support taxation and collection of tax from economic activities carried over digital platforms,” said KRA.
In January 201, the Kenya Revenue Authority (KRA) announced the coming into effect of the presumptive tax that is payable by all the businesses with an annual income of fewer than 5 million shillings.
According to the Finance Act of 2018, all small businesses were to start paying the presumptive tax at the rate of 15 percent of business permit fee or license payable from the 1st of January 2019.
The presumptive tax is basically going to affect all the small medium enterprises (SMEs) in Kenya. In a country where close to 500,000 SMEs are dying annually despite being a key contributor of 86 percent of employment and 45 percent to GDP, the new taxes hit the sector hard.
Presumptive tax targets all SMEs in Kenya and KRA hopped that it would help in widening its tax net.