Parastatal bosses risk arrest over tax evasion
President Uhuru Kenyatta wants Kenya Revenue Authority (KRA) to go after public officers who fail to remit taxes despite deducting them from employees.
While rewarding the top taxpayers of the financial year 2018/19 in Nairobi yesterday, Uhuru urged KRA to stretch its mandate beyond private businesses to catch cheats in the public sector.
The president said no one is above the law urging the taxman to go after parastatal chiefs and vice-chancellors who failed to remit Pay As You Earn (Paye) and other statutory deductions.
Public universities and parastatals owe KRA an estimated Sh10 billion with University of Nairobi, Kenyatta University, Jomo Kenyatta University of Agriculture and Technology ranked among institutions that have failed to remit the tax.
Kenyatta University has paid Sh120 million out of Sh2.1 billion in tax arrears. The University of Nairobi has settled Sh221 million from Sh3.5 billion outstanding tax arrears with JKUAT paying Sh295 million from the pending Sh890 million.
Uhuru also warned KRA staff and tax advisers who use their positions to abuse the system saying the government is developing a system that will make everyone accountable.
He, however, urged KRA to avoid being overzealous in its pursuit of taxpayers and urged the taxman to instead sit down with those who have not knowingly engaged in tax evasion to tackle their problems without taking them to court.
“We cannot criminalise everything. Fear and threats should not form the basis of the relationship between the taxman and the client. Someone might have made a legitimate mistake. Sit down together and find a solution,” said Uhuru.
He said that if such measures are taken, it would be hard for traders to make such mistakes again.
Uhuru lauded KRA for doubling the tax from Sh707 billion in 2013 to Sh1.58 trillion in 2018/19 financial year urging Treasury, KRA and Attorney General to review existing law with a view to strengthening KRA tax enforcement programme.
Experts say as economic fortunes dwindle worldwide, tax disputes will definitely increase, but they must be resolved numerically, speedily and, as fast as possible, amicably.
National Treasury has been pushing collection targets to unrealistic levels for the taxman to miss it target annually until Acting National Treasury Cabinet Secretary Ukur Yattani decided to cut the target for the current financial year.
The Treasury had set a tax collection target of Sh1.8 trillion in the current financial year despite KRA missing last year’s revised target by close to Sh100 billion.