The Kenya Revenue Authority (KRA) is not likely recover 94.4% of the Sh1.6 trillion that it has not collected from taxpayers as it admits that it’s doubtful of collecting the outstanding revenue balance of Sh1.51 trillion.
Auditor General Nancy Gathungu’s report tabled in parliament shows that uncollected debt went up by Sh142 billion in the year ended June 2021.
The report further revealed that the revenue accountability statements of the taxman reflect an outstanding revenue balance of Sh1.6 trillion compared to Sh1.459 trillion reported in June 2020.
The figures point that KRA did not collect more than Sh142 billion in the 12 months to June 2021.
The increase in the amount of uncollected revenue is being reported at a time when the government is struggling to raise enough revenues to address the budget deficit which is currently standing at Sh846 billion.
President Ruto sanctioned the austerity plan on the recurrent expenditures of ministries, State departments, and agencies (MDAs) in 2022/2023 year which largely focusses on foreign travel, training, and motor vehicle and furniture purchase budgets.
The budget cuts are expected to affect the earnings of several businesses, including motor vehicle dealerships, furniture manufacturers, suppliers, media and advertising agencies, hotels and oil dealers.
The Kenya Kwanza administration government is hard-pressed for resources to fund its flagship projects as harsh economic times continue to affect revenue collection.
The Auditor General says the KRA management reported that validation of the Sh1.6 trillion uncollected debts, as a pre-requisite for updating taxpayers’ ledgers is in the process.
KRA officials told auditors that measures have also been put in place to reduce the debts.
“These measures include implementing aggressive debt recovery initiatives, enhanced manual reconciliations, the vacation of erroneous debts, enhanced and comprehensive cleaning and validation processes on taxpayers records,” Ms Gathungu stated in a report.
The taxman is also rolling out the debt module in the iTax to transform debt processes as it focusses on reducing the piling uncollected revenue.
“Should the strategies implemented fail to yield results, the outstanding revenue balance will keep on increasing as indicated,” the Auditor General warned.
