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Kenya’s migration to online tax collection hits a snag

Kenya , 19 Mar 2014

Kenya’s migration to online tax collection hits a snag

Kenya’s plans to migrate to an electronic tax collection system hit a snag yesterday after the Kenya Revenue Authority (KRA) pushed the migration date to the new system, citing overloading by large numbers of users trying to use the system.

This was announced by KRA’s commissioner for medium and small tax payers, Alice Owour, who said that the new system would be effective June 1, instead of the initial set date of March 1.

This is a setback for the revenue collector, considering it was depending on the new system to increase its tax collection to Kshs1.175 trillion from the current Kshs973 billion.

“It is important to note that KRA is not rolling back on this noble initiative in order to ensure that all our services are automated and easily accessible by taxpayers in line with national strategy to digitise government services and payments,” said Owuor.

The system, dubbed iTax, has been in operation since October last year, when the government brought on board large and medium taxpayers. The system was however clogged once the government decided to also require individual taxpayers to register with the system in order to automate the whole tax collection process.

The Kenyan government is looking to seal loopholes created in the current manual tax collection, that has seen several citizens evading tax and also fueling of corruption among the taxman’s employees.

The current system has led to the government losing a lot of money especially when it comes to the payment of PAYE, VAT, stamp duty and excise duty.

With the new system, tax declaration and payment errors will also be significantly reduced. Tax evasion will also be eradicated considering that the new system will provide an integrated view of each taxpayer’s international and domestic trade operations.

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