How spying data and tools gave KRA another 324 billion shillings

Economy

How spying data and tools gave KRA another 324 billion shillings


Githii Mburu, Commissioner General of the Kenya Revenue Authority (KRA). PICTURES | JEFF ANGOTE | NMG

The Kenya Revenue Authority reported 324.81 billion shillings more in tax revenue in the 11 months to May than a similar period in the previous financial year thanks to aggressive use of data to catch cheaters, according to the Treasury statistics.

Treasury Secretary Ukur Yatani said in the latest filings at the Treasury that total tax revenue was nearly 1.64 trillion shillings between July 2021 and May 2022, up from 1.31 trillion shillings the previous year.

The 24.74% year-over-year increase in tax revenue came in a fiscal year where the tax department said it deployed “our strong intelligence network to penetrate cartels of corruption and tax evasion” in a context of economic recovery.

“Some people have made it their business model where tax evasion is part of their profitability. These are people we call hard-core tax evaders,” said Terra Saidimu, the commissioner of intelligence and strategic operations unit at the KRA. business daily in a previous interview on the strategy for achieving the fiscal target for this fiscal year.

“Once we have established that there is deliberate tax evasion, we pass it on to our investigators who investigate and, in some cases, recover taxes or prosecute. But lawsuits do not prevent paying taxes.

Treasury data, released last Friday, indicates that the KRA is ahead of the pro rata target for the 11-month period by 41.90 billion shillings.

This means the tax authorities – which collected 181.74 billion shillings in May – need to earn 103.19 billion shillings this month to meet the revised target of 1.74 trillion shillings for this financial year.

KRA Commissioner General Githii Mburu said last week that Times Towers expects to exceed the total revenue target – including agency revenue it collects on behalf of other state entities such as law of stamp – of 140 billion shillings.

Tax consultants said they expected the KRA to be more aggressive towards wealthy tax evaders in the coming months after announcing plans to set up a digital forensic lab to extract data from case files on tax evaders. taxpayers’ computers and smartphones.

This will include data from “email, text, video, audio, image files and other transactional data on hard drives and other storage media,” the KRA said in a statement. document inviting bids from potential vendors last month.

“When KRA put out a RFP (RFP) for a cyber security solution to spy on your social media account like WhatsApp status, that means lifestyle auditing will be something KRA will focus on. will support a lot to increase his income,” said Philip Muema, a partner at a tax and business advisory firm, Andersen Kenya.

“It will be a bit difficult for businesses…because there will be increased scrutiny from a revenue perspective. More people will be brought into the tax net.

Times Towers increasingly relies on information shared between its detectives and detectives attached to other law enforcement and intelligence agencies to foil suspected tax evasion schemes.

These include the National Intelligence Service, the Directorate of Criminal Investigations, the Financial Information Center, the Ethics and Anti-Corruption Commission, and the Office of the Director of Public Prosecutions (ODPP).

“We are a rich country and that is the reality. We just need to tighten the screw and close the revenue leaks,” Mr. Muema said.

Tax experts and business leaders have complained over the years that Kenya’s tax system is overburdening a few formal sector people and businesses with increased taxes.

For example, about 6.1 million taxpayers were registered on the electronic tax payment and reporting platform, iTax, in June 2021, compared to more than 19.6 million registered voters in the 2017 presidential election.

The number of voters passed the 22 million mark this year, according to provisional statistics from the Independent Electoral and Boundaries Commission.

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