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Kenya Revenue Authority's new system to monitor taxpayers

By , ITWeb
Kenya , 31 May 2012

Kenya Revenue Authority's new system to monitor taxpayers

The Kenya Revenue Authority (KRA) plans to introduce electronic tax registers (ETRs) to properly monitor taxpayers.

Last year the authority missed its target for collections by Sh34.9 billion in the third quarter. The devices would therefore help submit real time data after each transaction and are General Packet Radio Service (GPRS)-enabled, meaning the authority can locate each device.

A report shows that last year the KRA collected Sh465.2 billion of the Sh500 billion that was targeted, and a sizeable portion of these lost revenues was the result of tax evasion.

The new devices relay data to the KRA’s central servers, allowing the authority to reconcile collected information with monthly tax returns, making it more difficult for businesses to evade tax. They hope that introducing wireless connectivity between businesses and the authority will save on operating costs and prevent the loss of billions of shillings through fraud.

“The technology gives KRA real time records of all payments made or received prior to the filing of tax returns,” said Kennedy Onyonyi, KRA spokesman.

“The value of these devices to us is that they eliminate the risk of losing revenue in the event that an ETR machine is stolen from a taxpayer’s premises because KRA will have all the information in its server,” he added.

Onyonyi also said, the devices should also bring small traders and the informal sector into taxation, with the KRA estimated by the Parliamentary Budget Office to have lost more than Sh200 billion on the informal sector not paying tax over the last three years.

Parliament has already amended the law to allow for the introduction of the tax registers through the recent Finance Act 2012, making it a requirement for people to use the ETRs.

“Most ETR machines currently in use have almost exhausted their lifetime of five years or 1,800 reports and it is only fair that they should be asked to buy GPRS-enabled ones while replacing them,” said Onyonyi.

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