The Kenya Revenue Authority (KRA) has set its focus on gamblers and mobile money users with plans to introduce new taxes in July after falling Ksh53 billion ($530 million) short of the half-year target.
KRA commissioner-general John Njiraini Tuesday said it is proposing to introduce a 10 percent excise duty on betting in the forthcoming national budget.
Mobile phone-based payments are set to come under the taxman’s radar and will be included in an expanded list of transactions that require personal identification numbers (PINs).
Mr Njiraini said KRA has projected that it will miss the annual tax collection target set by the Treasury by Ksh110 billion ($1.1 billion) by the end of June. The government financial year runs from July to June.
Taxpayers will therefore be required to dig deeper into their pockets to finance government operations, the taxman said.
Receipts from taxes, levies, earnings from investments, rental income and fines – technically referred to as ordinary revenue – amounted to Ksh722.28 billion ($7.22 billion) in the first six months of the financial year against a target of Ksh774.99 billion ($7.75), latest Treasury statistics show.
The ordinary revenues in the July-December 2018 period were, however, Ksh65.39 billion ($654 million) or 9.95 percent more than Ksh656.90 billion ($6.57 billion) in the corresponding period a year earlier, which was clouded by a bruising presidential poll contest.
Mr Njiraini told Parliament that the proposal to expand the list of transactions that require PINs to include registration and renewal of membership with professional associations or bodies have been submitted to the Treasury.
Other proposals include listing “hardcore” or non-compliant taxpayers with the Credit Reference Bureaus (CRBs).
“The issue of taxes has become a bit of challenge to us and we want provisions that will allow KRA to request for listing of some taxpayers we call hardcore. Despite existence of the law, we are unable to collect from them,” he said.
“We are also proposing to make provisions to allow access to third-party information. This will address the challenge under the current legal framework on sharing of information related to tax matters that may be in possession of third parties,” Mr Njiraini told the National Assembly’s Finance and National Planning committee.
Mr Njiraini said KRA is also targeting tax collections from economic activities carried out over digital platforms.
“Most transactions are moving towards digital platform and the current legislation doesn’t exclude this but needs clarification on how those transactions can be subjected to tax. We want to ensure we capture this sector and expand the tax base,” said Mr Njiraini.
Professional bodies, including Law Society of Kenya, Institute of Certified Public Accountants of Kenya and others, will be required to ensure that professionals wishing to be registered produce their PINs prior to admission to the bodies.
The KRA is also seeking to expand the scope of application of withholding tax to services that are not currently captured in the current legislation.