Kenya Revenue Authority has defied tough operating period to record a 97 percent tax collection falling Sh275 billion short of the set projection
Since he assumed office The KRA commissioner general, Githii Mburu has put up an aggressive tax collection strategies including the exercise stamp tax on drinks.
This represents revenue growth of 1.7 percent compared to last years’ collection.
VAT tax refunds
Already the taxman is seeking increased allocations every month from Treasury to settle a mounting backlog of tax refund claims from businesses grappling with the coronavirus pandemic-related hardships.
KRA began 10 billion tax refunds to businesses a month ago as a way of cushioning them from the effects of the pandemic.
KRA says it has applied for Sh3 billion up from the current Sh1.2 billion allocations amid the backlog and new claims filed for Value Added Tax (VAT) refunds.
KRA projects a rise in claims for VAT refunds at a time most small firms are facing cash-flow woes that in addition to the backlog, will pile more pressure on its constrained budget.
The taxman paid Sh25 billion in VAT refunds in the year ended June up from Sh14.1 billion paid in the 2018/19 period.
“KRA has sought an enhancement of monthly VAT refunds allocation from the current Sh1.2 billion to Sh3 billion from the National Treasury to help cope with the increasing number and value of claims,” the taxman said Wednesday.
During the reading of the 2019/20 budget, the National Treasury gave KRA a Sh1.88 trillion tax revenue target.
Including Appropriations in Aid, the government was targeting to net Sh2.1 trillion in local revenues to help fund part of the Sh2.8 trillion budget. But revenue projections have been a moving target after the government revised the national budget three times in the financial year that ended in June, as it became clearer that it was too ambitious.
In addition, KRA says it also collected other monies including Agency Fees amounting to Sh97.1 billion.
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