Ever wondered why the Kenya Revenue Authority (KRA) never hits its tax collection targets every year? For instance, last year KRA missed its half-year tax collection target by Sh88.3 billion, netting only Sh857.8 billion over the period.
KRA Loses
Take, for instance, this Lamborghini Urus which is estimated to be worth according to online sources is KES 20,732,000 as of March 6, 2020. The Lambo is owned by local company Ndovu Cement but the Kenyan firm was slapped with the harsh car tax regime.
According to Kenyan Bulletin’s sources, the owners of the Lambo were asked by KRA to pay Ksh 20 million in taxes, so the owner of the vehicle decided to register the car in Uganda. KRA ate dust, yet the car is used in Kenya.
Ever seen on the Interwebs how Kenyans brag that there are many Lamborghinis on our roads yet most of them have customized Ugandan or South Sudan’s number plates? KRA gets nothing from these machines and its because they have decided to have unmanageable tax charges.
This scenario is replicated in many cars. The duties for an Audi A4, early last year was around 600K, KRA hiked the taxes early this year to 800K.
Our sources from Car Importers have confirmed that no one is importing the Audis any more and KRA once again have lost Taxes.
Our President says he schooled and, I can not verify, graduated with a degree in economics, political science and government at Amherst College in the United States. If KRA is losing and importers to aren’t on business, the same replicated in all sectors, how does he think that the economy will rise? Who advises him in matters economy and what is his part in the fight to revamp the economy? Isn’t he an Economist?
How is the government committed to wiping out tax evaders if the Taxman has decided to hang the economy at the mercy of scammers and fraudsters?
According to a new update by the National Treasury shows that KRA failed to hit the target for all the tax categories, with the biggest miss being registered under income tax. This even as Treasury spent Sh1.14 trillion on recurrent, development expenditures. KRA, which Treasury Cabinet Secretary Ukur Yattani said had been given all the necessary support, including financial, is expected to raise Sh1.8 trillion by the end of June.
The ministry had projected that it would spend Sh1.3 trillion by December 2019. A sluggish economy saw profits for companies dwindle and employees fired, a development that affected the collection of taxes from employers and employees.
Tax collection as of December last year, however, rose by 18.8 percent from Sh722.3 billion in December 2018. KRA collected Sh367.4 billion from businesses and employees, missing its target for the period on Income Tax by Sh25.9 billion.
The Treasury data also shows that KRA collected Sh103.3 billion from excisable goods such as beer, tobacco, airtime, financial services. This is against a target of Sh127.9 billion.
Value-added tax, also known as consumption tax and which is charged at 16 percent, gave the Exchequer Sh211.5 billion against a target of Sh224.6 billion.
Judiciary saves
From all the tax collection channels, the most improved revenues were fines and fees. They all went up by 108.5 percent, earning KRA Sh123.9 billion.
