NAIROBI, Kenya, Feb 28 – The Kenya Revenue Authority (KRA) has suspended all tax relief payments as it seeks to audit and enhance the processes related to the payment of tax refunds, exemptions, waivers, and abandonments.
The taxman noted that the suspension, effective February 28, follows concerns from taxpayers, initiating the need to restructure rules and procedures governing tax exemptions.
Despite the suspension, the taxman said it will continue to comply with the law by assessing and processing the tax reliefs, however, payments will not be disbursed until the end of the process.
According to KRA Board Chairman Anthony Mwaura, the suspension and ongoing review of tax reliefs is aimed at increasing the impact of tax expenditure on economic growth.
“This will be achieved through minimizing tax expenditure and aligning it with international best practices for better internal revenue,” said Mwaura.
The KRA Board Chair notes that the improvement is part of the Government’s strategy to seal revenue leakage and enable KRA to mobilize more taxes towards the country’s economic growth.
“It is also part of the aggressive revenue mobilization plan aimed at enhancing revenue collection and redirecting resources to finance priority growth-supporting programmes,” said Mwaura.
In the past five years, KRA has granted tax reliefs and incentives totaling Sh610 billion, with an average of Sh122 billion per annum.
Tax refunds are made to reimburse excess tax paid or remitted in error in a given period and when tax deducted at source is more than the final liability. They cover value-added tax (VAT), income tax, excise, and stamp duty.
