Taxman owed Sh80bn by defaulters

BY LUKE MULUNDA

NAIROBI January, 24, 2012 – The Kenya Revenue Authority is bracing itself for a tough and long fight to recover nearly Sh80 billion it is owed in tax arrears. With the fiscal year past midpoint, the tax man says it would even use the courts to compel those holding up tax money to pay up.

KRA faces the unenviable huge task of raising Sh733.4 billion for this financial year given that Kenya’s economy is more or less mark-timing, with forecasts dimming by the month.

So the authority has to employ tougher measures to meet this target, which is 15.5 per cent higher than last financial year collection of Sh634.9 billion. But the million dollar remains: who is (are) holding this money, which can run an average ministry for a whole year?

“We are going flat out,” Mr Michael Waweru, the Commissioner General who leaves office in March this year, said at a press conference today when KRA released the revenue performance for the period between October and December 2011.

According to the figures KRA raised Sh177.2 billion for the three months compared to Sh162.7 billion over the same period in the financial year 2010/2011, representing an 8.9 per cent improvement. For the half year between July and December, the tax collector raised Sh338.1 billion, which is 11.6 per cent higher than the Sh303.1 billion collected as at the first half year of the previous financial year.

Mr Waweru said experience has shown that the second half of the financial year is always better than the first. The tax authority is expected to raise Sh395.3 billion between now and June and Mr Waweru said the authority is going out of its way to meet this target.

“Despite the unfavourable economic environment, KRA will go the extra mile to mobilise revenue so that the government can implement its policies,” said Waweru. KRA said it has collected Sh7.2 billion between July and December as tax arrears comprising of Sh4.3 billion raised in the last three months of last year.

The tax authority is projecting to raise Sh164.3 billion between January and March this year but has expressed fears that unfavourable economic environment experienced in the second quarter may continue into the third quarter thereby hitting revenue performance.