Oral East Africa>Tax pledges accepted, new KRA chair says At the hut of the story

Written by Oral East Africa

The Kenya Revenue Authority focus has turned to disputed taxes and penalties to fill the gap of falling tax collections with the new chairman Ndiritu Muriithi asking businesses that cannot pay, to negotiate friendly installments.

Tax collections have hit a Laffer-curve, struggling from IMF imposed tax austerity that has hit domestic spending power and business profits and sparked deadly protests further depressing the business environment.

The taxman says, there is potential to collect part of the Kes315.5 billion stuck in court disputes with taxpayers, through a policy of out of court settlement and an amnesty on penatiles and interest to settle the bills.

KRA says the strategy has been successful netting the government Kes50.5 billion in taxes since it was first rolled out in the 2023/2024 financial year, and has been extended each year with the current extension set to lapse 30th June 2025.

Mr Muriithi urged those with disputes to drop court cases and negotiate through KRA alternative dispute mechanism and take advantage of the extended tax amnesty programnme, that has waived all penalties and interests for all periods up to 31st December 2023.

installments

He urged businesses which could not afford to pay up accrued taxes in one swoop to negotiate an installment plan given the current state of the economy.

“We recognise that economic activity has been less buoyant than desired. Therefore, for those clients who may have challenges in settling the principle tax arrears in a lump sum, we encourage you to approach us for affordable, friendly and flexible payment plans,” Mr Muriithi said in an oped in Business Daily.

tax clients

The taxman is changing strategy after aggressive tax measures resulted in pilling litigation and closer of some businesses. Faced with huge tax claims, penalties and crippling agency notices, some firms have been opting to call it quits.

Faced with criticism, President William Ruto, directed the taxman to slow down on what he termed harassment of Kenyans and the incoming KRA chair Mr Muriithi seems to be reading from the same script.

He is promising to treat taxpayers like ‘clients’ who will receive every opportunity to be heard before rushing to court.

He said where tax disputes arise, KRA will resolve them in the timeliest and cost-effective manner through a robust Alternative Dispute Resolution programme, alongside the Tax Appeals Tribunal.