KRA Commisioner General Githii Mburu during a past event. He has been elected to the governing council of continental tax body. {Photo: The Nation}.

While presenting his budget for the financial year 2020/2021 last week, Treasury Cabinet Secretary Ukur Yatani proposed a raft changes to the law, and among the mooted alterations were proposed amendments to the Kenya Revenue Authority (KRA) Act.

According to an assessment of Treasury Cabinet Secretary Ukur Yatani’s Budget Day proposals by audit & financial services firm KPMG, the government is fronting a Bill that seeks to introduce a time limit for suing KRA to 12 months from the date an action arose or 6 months from the cessation of continuing damage or injury.

The Bill further introduces a requirement to give the KRA a month’s notice to sue which should be served on the Commissioner-General before instituting legal proceedings against KRA.

This means that the government wants to manage the suits that can be leveled against KRA denying potential litigants the freedom to seek legal redress which has alot of implications including the ability of a business owner to seek tax refunds or in the event of overreach by the authority.

“Suits may be dismissed if lodged out of the prescribed time. In addition, they may be dismissed if KRA was not notified a month in advance of the intention to sue,” reads KPMG’s report.

The one month’s notification to sue also appears under the Government Proceedings Act (GPA). However, the provision under the GPA was declared unconstitutional in 2012.

County Governments

The Bill also seeks to introduce a commission to be paid to KRA by county governments where KRA has assisted it to collect revenues. The commission is capped to 2% of the revenue collected.

The proposed change seeks additional source of revenue to the KRA where it collects revenue on behalf of a county government or government agency such as the recent deal between the National Government and Nairobi County where KRA was appointed as an agent to collect revenue on behalf of the County.

The Bill also seeks to create an avenue for the KRA Board to make regulations for capacity building and training.

The proposed introduction will assist the KRA to streamline the various initiatives it has on capacity building and training.

This includes the running of a training institution. It is, however, not clear what the place of the Kenya School of Revenue Administration (KESRA) will be under the new proposals.

Private Equity

Treasury is also seeking to empower the Capital Markets Authority (CMA) to license, approve, and regulate private equity and venture capital companies that have access to public funds.

“The proposed amendment will provide the CMA with supervisory powers over private equity and venture capital companies that have access to public funds. More clarity may be required on the definition of public funds since
some of these companies get their funds from private sources,” KPMG said in its analysis.

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