There is a growing need to harness broader resources from the society to drive tax collection more effectively. Speaking during the close of the 4th Annual Tax Summit at the Kenya School of Monetary Studies (KSMS), Nairobi, KRA Commissioner General Mr John Njiraini said that the success of the future of tax administration needs to go beyond the work tax administrators alone.
He noted that partnerships between revenue administrators and various stakeholders such as innovators and academicians are a significant injection for effective tax administration.
?The future of tax administration environment will be quite different from the way we know it today. There is therefore a need for tax administrators to get into partnerships with various stakeholders because the knowledge needed to drive tax administration going forward will go beyond what tax administrators possess,? Mr Njiraini said.
The Commissioner General (CG) observed that KRA is already leveraging on partnerships with scholars and innovators to enhance the efficacy of tax administration in Kenya .
?These partnerships are very significant especially at this time when we are talking about tax base expansion. Speaking of tax base expansion, most ideas on tax base expansion have come from the techsavvy members of our society and the analysis on the proposed ideas shows that they are viable ideas,? he noted.
Mr Njirani indicated that as much as tax base expansion is a global challenge that most tax administrators are grappling with, the success of this programme requires bold approaches. He said that one of the approaches KRA is leveraging on is access to various data sources.
As the government prepares to implement the presumptive tax regime for small scale enterprises, the CG observed that KRA shall explore ways to refine the regime so that it works even better for the country.
Presumptive tax, which shall be based on single permit fees for the small scale traders, was proposed by the Cabinet Secretary of the National Treasury during his budget statement in June this year. Its implementation shall effectively phase out the current turnover tax regime.
The CG lauded the proposed regime noting that it will work better for the target sector than the incumbent turn over tax regime.
?Introduction of the presumptive tax points to a move from a declaratory system to a system where tax is assessed based on a defined criteria. This will work better in this country, especially for the small scale enterprises,? Mr Njiraini said.
As technological advancement continues to proliferate in the country, the CG indicated that this proliferation has continued to create opportunities for tax administration in Kenya. Citing mobile money transfer technology, he said that mobile money transfer has created an even bigger opportunity for Kenya.
?This technology has formalised what was not formal as far as cash transfers were concerned. The technology has availed data that we never had on cash transactions,? he said.
He added that KRA?s interest in leveraging on mobile data is founded on the need to confirm that the transactions on mobile money are consistent with the declarations made on the transactions.
Mr Njiraini stated that some of the technologies supporting e-commerce in the country are hosted outside Kenya?s jurisdiction thereby availing an opportunity for cross border transactions. This, he said, makes the issue of international cooperation extremely important more than ever.
?E-commerce is not a threat as some may have perceived it but rather a great opportunity for all of us. This informs the need for global response on the issues surrounding e-commerce because we may not be able to respond to these issues individually,? Mr Njiraini remarked.
He added: ?So far globally, governments and tax administrations have made significant advances in developing global cooperation frameworks through which we can negotiate to share revenues that arise from cross border electronic commerce.?
As KRA concluded the 4th Tax Summit, the Commissioner General said that the summits has been instrumental in bringing thoughts of stakeholders across board together with a view to making tax administration more effective. He said that KRA is in the process of creating mechanisms of engagement with stakeholders and various institutions to make the tax summit agenda more impactful.
His sentiments were echoed by KRA Commissioner in charge of Strategy, Innovation and Risk Management Dr Mohamed Omar who observed that a dashboard will be developed before the subsequent tax summit highlighting the various actions taken with regard to the recommendations given by the various stakeholders.
He also said that KRA is committed to getting into strategic partnerships with various stakeholders to enhance tax administration.
Dr Omar noted that the tax summit, which marked its fourth year this year, aims at bringing together experts from various fields and disciplines such as academicians, professionals, public as well as private sector players to deliberate and dialogue on matters tax administration.
?The overarching mantra of this summit is to look at the way forward in supporting the socio-economic transformation of Kenya in line with supporting the big four agenda. It is also in line the country?s Vision 2030,? Dr Omar said.
He added: ?One of the components of the summit is to look at how we can come up with strategies and policies to expand the tax base and support the economic prosperity of this country.?
The next tax summit shall be held in October next year.