KRA Goes After Hustlers with New Collection Units to Boost Revenue

KRA staff inspects a business during a door-to-door crackdown on Nairobi businesses on Thursday, March 18, 2021. Twitter

The Kenya Revenue Authority has now focused its attention on the informal sector through the newly established KRA Department of Micro and Small Taxpayers.

The new department is focusing on businesses and individuals with a turnover of Ksh200 million or less in its bid to expand the tax net.

George Obell, the Acting Commissioner of the newly established KRA Department of Micro & Small Taxpayers, stated that the contribution from the informal sector remains negligible.

“What we miss on the large and medium side is the numbers are on this other side; for example, we have about 20 million PIN holders and most of them are the small and micro taxpayers, these are the ones we want to focus on.

"And if you look at the entire bucket of domestic taxes, medium, large and government agencies give us about 86 percent and all these other numbers give us only 14 percent, and you see the opportunity there to be able to grow the basket,” Obell said.

File image of KRA headquarters at Times Tower in Nairobi.

The tax authority observed that even though some individuals have registered for their Personal Identification Number, there are plans to oversee transactions of micro and small taxpayers to ensure accurate revenue declaration.

As per Obell, KRA will examine data from these businesses, gathering transaction information at all levels for tax-related purposes.

“That’s where we got a gap, and how to address this we are looking at the data that is available. You’ve got information when you're doing transactions at every level, that information or that transaction will be picked out; let me give you a simple example, if you offer services to an established business and it’s a service that attracts withholding tax,” Obell explained.

“They are going to withhold and remit and they are going to ask you for your PIN and use information to remit that now that withholding tax is not a final tax, so we already are expecting you to know that at the end of a period you’ve got to file and declare the total income and we can work backwards.”

KRA anticipates that this new department will tackle these challenges, ensuring greater involvement from these sectors.