REMARKS AT MEDIA BRIEFING J. K. Njiraini, MBS Commissioner General Kenya Revenue Authority 22ND SEPTEMBER 2015 - PowerPoint PPT Presentation

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REMARKS AT MEDIA BRIEFING J. K. Njiraini, MBS Commissioner General Kenya Revenue Authority 22ND SEPTEMBER 2015

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REMARKS AT MEDIA BRIEFING J. K. Njiraini, MBS Commissioner General Kenya Revenue Authority 22ND SEPTEMBER 2015 1. FOCUS Core Tax Reform Drivers Briefing on Rental ... – PowerPoint PPT presentation

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Title: REMARKS AT MEDIA BRIEFING J. K. Njiraini, MBS Commissioner General Kenya Revenue Authority 22ND SEPTEMBER 2015


1
REMARKS AT MEDIA BRIEFING J. K. Njiraini,
MBSCommissioner General Kenya Revenue
Authority 22ND SEPTEMBER 2015
2
1. FOCUS
  • Core Tax Reform Drivers
  • Briefing on Rental Income Taxation Reform
  • Briefing on Withholding VAT Scope Expansion

3
2. CORE REFORM DRIVERS
  • Simplicity Make legislative/administrative
    processes simpler reduce legal and
    administrative complexities.
  • Convenience Offer convenient compliance
    mechanisms primarily focus on
    automation via electronic and mobile
    platforms
  • Lower Compliance and Administration Costs
    implement processes that make tax
    collection cheaper for both Taxpayer and
    KRA.

4
2. Core Reform Drivers (Contd.)
  • Expand Taxpayer and Tax Base Implement
    mechanisms that facilitate
  • Easy recruitment of eligible taxpayers
  • Detection/prevention of tax fraud
  • Both objectives can be addressed effectively by
    leveraging Third Party Data

5
3. RENTAL INCOME
  • Core Challenges enhance compliance levels
  • - increase taxpayer
    numbers
  • - improve
    declaration accuracy
  • Key Challenges
  • Tax payers found previous regime complex and
    difficult to comply with
  • generation of tax disputes e.g. deductible
    expenses
  • Integrity challenges scope for compromise
  • Large proportion of property owners in default
    and hence reluctant to come forward.

6
3. Rental Income (cntd)
  • Approach Taken
  • Introduce simplified taxation regime pegged on
    gross rental income
  • Final tax _at_ 10 of gross rent
  • Applicable for income thresholds below Sh.10
    million p.a.
  • KRA to focus on recruitment and mobilisation.
  • Introduce amnesty for back taxes
  • Create incentive to attract defaulters.
  • Marketing Campaign commenced
  • Media campaign
  • Outreach clinics
  • Recruitment teams (agents/part timers)

7
4. WITHHOLDING VAT
  • Previous WHVAT regime discontinued in 2010
  • VAT refunds backlog excessive withholding.
  • Weak process management and potential abuse
    fraudulent claims
  • New regime re-introduced in June 2014.
  • Capture data on persons trading with Government
  • Partial withholding (6) to avoid refund claims
  • Focus on information capture not revenue
    mobilisation
  • Withholding process automated through iTax

8
4. Withholding VAT (Cntd)
  • Scope of expanded in June 2015
  • Other taxpayers _at_ KRA discretion.
  • Roll out done in respect of 43 Taxpayers.
  • Scope expansion to cover LTO MTO taxpayers
    within 60 days (approximately 3200 Taxpayers).
  • Significant data capture and resultant benefits
  • Taxpayer recruitment
  • Detect income mis-declaration
  • Implement Strategy for Data Utilisation (short
    long term)

9
5. CONCLUSIONS
  • Continuously Pursue Innovations
  • Leverage Technology
  • Process Reforms
  • Expand Partnerships with Key Players
  • Counties Exploit Synergies.
  • Professional Business Associations
  • International Partners best practices,
    knowledge sharing.

10
5. Conclusions (Cntd)
  • Sustain Reforms for Enhanced Service Delivery
  • 6th Corporate Plan Theme Vision.
  • Building Trust through Facilitation so as to
    Foster Compliance with Tax and Customs
    Legislation
  • Organisational Process Reforms Audit
    Governance, Tax Dispute Resolution
  • Pursue Total Automation
  • Accelerate Staff Culture Change
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