Home Business Treasury tax deal to unlock Sh133bn from stalled cases

Treasury tax deal to unlock Sh133bn from stalled cases


Economy

Treasury tax deal to unlock Sh133bn from stalled cases


MBURU-KRA

KRA Commissioner General Githii Mburu. FILE PHOTO | NMG

edwinmutai_img

Summary

  • The Treasury told Parliament that it struck the deal with the appeals tribunal to hear and determine the cases that have for years barred KRA from collecting the billions of shillings.
  • The stalled cases at the appeals tribunal are estimated to be worth over Sh200 billion as wealthy Kenyans and firms fight off the taxman denying the country funds for development.
  • KRA Commissioner-General Githii Mburu last year told Parliament that the agency had witnessed a surge in taxpayers challenging notices for unpaid taxes at the TAT.

The Treasury and the Tax Appeals Tribunal have agreed to conclude stalled cases within 50 days, unlocking over Sh133 billion that that Kenya Revenue Authority (KRA) is seeking from wealthy people and firms.

The Treasury told Parliament that it struck the deal with the appeals tribunal to hear and determine the cases that have for years barred KRA from collecting the billions of shillings.

The stalled cases at the appeals tribunal are estimated to be worth over Sh200 billion as wealthy Kenyans and firms fight off the taxman denying the country funds for development.

KRA Commissioner-General Githii Mburu last year told Parliament that the agency had witnessed a surge in taxpayers challenging notices for unpaid taxes at the TAT.

“We had an engagement with them (Tax Appeals Tribunal) and we have asked them to ensure that within 50 days, they should have concluded cases worth Sh133 billion,” Musa Gathanje, the Treasury director for macro and fiscal affairs told the Senate committee on Finance and Budget.

This stalled cases have derailed enforcement actions like asset freeze, deactivation of personal identification numbers (PINs), travel bans and prosecution that ultimately lead to payment of unpaid taxes.

The KRA detectives last year identified 1,309 firms and wealthy individuals that owe it billions of shillings as it steps up efforts to recover billions of shillings. The onslaught on tax cheats has coincided with a jump in cases filed at the tribunal, which rose 31 percent to 408 suits in the nine months to September last year.

While at the tribunal, the taxman cannot enforce stiff measures contained in the Tax Procedures Act of 2015, which allows the taxman to issue travel bans on suspected tax cheats, collect duty directly from suppliers and bankers of defaulters and prosecute those in arrears.

The gravity of the country’s rapidly deteriorating cash-flow situation that is marked by falling revenues and worsening debt service obligations is forcing the KRA to change tack.



Source link