The Kenya Revenue Authority (KRA) has announced the suspension of all tax relief payments effective immediately.
In a statement issued just days after a management purge forced out Commissioner-General Githii Mburu and other top officials, board chairman Anthony Mwaura, who also served as chairman of the UDA’s National Elections Board, said the move was motivated by growing public concern about how tax reliefs and exemptions were administered.
KRA explained that the move was part of the government’s strategy to collect more tax and stop the unexplained loss of collected revenue.
“The Kenya revenue authority in concurrence with the National Treasury and Economic planning has suspended all tax relief payments until further notice.
“The improvement is part of the government’s plan to seal revenue leakage and enable KRA to mobilise more taxes towards the country’s development,” the statement read in part.
Furthermore, the announcement stated that the suspension and ongoing review of tax relief was intended to increase the impact of tax expenditure on economic growth.
“This is part of the aggressive revenue mobilisation plan aimed at enhancing revenue collection and redirecting resources to finance priority growth supporting programmes.
“It will be achieved by minimising tax expenditure and aligning it with international best practices for better internal revenue,” the authority added.
In the past five years, KRA has granted tax reliefs and incentives totaling Sh610 billion, with an average of Sh122 billion per annum.
The move to suspend the payment of tax reliefs allows KRA to audit and enhance the tax relief processes and procedures.
The suspension effectively halts payments to businesses such as tax refunds, exemptions, waivers and abandonments.
