BUSINESS ECONOMY

KRA’s Voluntary Tax Disclosure Program to Improve Revenue Collection

JUDITH NDUNDEFeb 25, 20211 Mins read2k

Kenya Revenue Authority headquarters at Times Tower Nairobi.

Being in possession of motor vehicles for which duty has not been paid is an offence under section 200 (d) (iii) as read together with section 210 (c) of the East African Community Customs Management Act 2004.

The Kenya Revenue Authority (KRA) has kicked off a tax compliance drive aimed at facilitating the Voluntary Tax Disclosure Programme (VTDP).

The VDTP provides a platform for a taxpayer to disclose tax liabilities that were previously undisclosed to the Commissioner for the purpose of being granted relief of penalties and interest arising from the tax disclosed.

The VDTP is aimed at improving revenue collection through enhanced compliance.

Speaking when she confirmed the activation of the VTDP drive, KRA Commissioner for Domestic Taxes MRispah Simiyu said taxpayers had been urged to take advantage of the prevailing VTDP which allows for the declaration of previously undeclared taxes. Once full declarations are made and principal tax paid the taxpayers, they will enjoy a waiver of interest and penalties.

“As part of our administrative actions, we have already dispatched notices to thousands of taxpayers asking them to take advantage of the VTDP by declaring and remitting their previously undeclared taxes. This notice is non-discriminatory and purely targets taxpayers deemed to be non-compliant on our i-Tax platform,” Mrs. Simiyu said.

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Minimum tax in Kenya — VTDP shall be effective 1st January 2021 and shall be in effect for a period of 3 years up to 31st December 2023.

On other compliance efforts currently being undertaken, it is instructive to note that in the National Budget Policy Statement 2021 recently published by the National Treasury, the government through KRA has commenced strategic efforts to boost revenue performance further and mitigate revenue risks from the Covid-19 Pandemic.

Revenue enhancement measures currently underway include robust intelligence collection, investigations, and revamping of taxpayers’ audit function.

Audit teams have been set up at the KRA Large Taxpayers Office (LTO), Medium Taxpayers Office (MTO), and all Tax Service Offices within Nairobi Region. The audit teams use data to identify compliance risks, develop and implement compliance improvement plans at the sector levels.

The audits are leveraging on KRA’s Data Warehousing platform and the Business Intelligence Solution for case management.

KRA is also enhancing its debt recovery program by reducing the outstanding tax portfolio using the debt module in i-Tax and reviewing payment plans.

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