KRA suspends payment of tax relief to enhance the process (2024)
In a bid to enhance the current processes related to the payment of tax refunds, exemptions, waivers and abandonments, the Kenya Revenue Authority (KRA) in concurrence with the National Treasury & Economic Planning has suspended all tax relief payments with effect from 28th February 2023 until further notice.
In the past five years, KRA has granted tax reliefs and incentives totalling Kshs. 610 Billion, with an average of KShs.122 Billion per annum. The move to suspend payment of tax reliefs allows KRA to audit and enhance the tax relief processes and procedures. KRA continues to comply with the law by assessing and processing the tax reliefs during this process. However, payments will not be disbursed until the end of the process.
The suspension of tax reliefs follows concerns from taxpayers, initiating the need to restructure rules and procedures governing tax exemptions. The current suspension and ongoing review of tax reliefs is also aimed at increasing the impact of tax expenditure on economic growth. This will be achieved through minimising tax expenditure and aligning it with international best practices for better internal revenue.
KRA is optimistic that the enhancement of the tax relief process and procedures will offer a permissible issuance of tax exemptions; it will also ensure equitable processing of tax reliefs.
The improvement is part of the Government’s strategy to seal revenue leakage and enable KRA to mobilise more taxes towards the country’s economic growth. It is also part of the aggressive revenue mobilisation plan aimed at enhancing revenue collection and redirecting resources to finance priority growth-supporting programmes. This move is aimed at powering the Bottom up Transformation Agenda (BETA).
In addition to enhancing trust and facilitation, KRA remains committed to provision of excellent customer service to taxpayers. The Authority will continue working closely with taxpayers to resolve arising issues for ease of tax compliance.
The move to suspend payment of tax reliefs allows KRA
KRA
KRA is charged with collecting revenue on behalf of the government of Kenya. To assess, collect and account for all revenues in accordance with the written laws and the specified provisions of the written laws.
to audit and enhance the tax relief processes and procedures. KRA continues to comply with the law by assessing and processing the tax reliefs during this process. However, payments will not be disbursed until the end of the process.
As shown above, the maximum rate of 35% will be charged on income in excess of KES 9,600,000. Resident individuals are entitled to a personal relief of KES 2,400 per month.
The findings indicate that the greatest challenge KRA encountered was resistance to change followed by lack of requisite skills. Other challenges included lack of resources and a supportive telecommunication infrastructure.
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