REVEALED: KRA Acquires New Surveillance System For Tax Evaders
Following the introduction of a new electronic tax management technology by the Kenya Revenue Authority (KRA), which is intended to identify and target non-compliant taxpayers, Kenyans who have been dodging taxes are now under scrutiny.
The administration has already started piloting the system, Treasury Cabinet Secretary John Mbadi revealed in an appearance on Ramogi TV on Tuesday night.
The technology has identified about 500,000 Kenyans who have been avoiding paying taxes, according to preliminary data from the experiment.
Landlords who routinely fail to pay the 7% rent income tax are among the primary offenders.
“We have a system which we began implementing on Tuesday. It has mapped and identified over 492,000 people who do not pay taxes but are supposed to,” Mbadi said.
“We want to tell you that we have now spotted you, since you used to evade us.”
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The rent income tax compels landlords to pay 7% of their gross rental income to the KRA.
According to Mbadi, the government was meant to receive Ksh82 billion from this tax each year, but in prior years, it only collected approximately Ksh17 billion, accounting for about 20% of the total.
“This system is part of the reforms we promised when we presented last year’s budget,” Mbadi explained. “It will allow us to focus on those not paying taxes without increasing rates for compliant taxpayers.”
Adding that, “It is unfair that a teacher earning Ksh40,000 pays almost half of their salary in PAYE while some in the private sector earning over Ksh300,000 pay nothing. This system will help close the revenue gap created by non-compliance.”
On Monday, the CS also announced intentions to provide tax relief to Kenyans earning less than Ksh30,000. Speaking at Kiambu National Polytechnic, he claimed President William Ruto has approved the idea.
Mbadi stated that taxing lower-income individuals has hampered economic activity, particularly at the grassroots level, and that lowering their tax burden could encourage growth.
Meanwhile, during the interview, CS Mbadi explained that the exclusion of income earners of Ksh30,000 and less would mean that the taxation would then apply only to amounts earned beyond that mark.
Deputy President Kithure Kindiki also affirmed Mbadi’s sentiments on Wednesday while addressing the United Democratic Alliance (UDA) aspirants at State House, Nairobi.
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Kindiki revealed that the proposals for tax exemptions would be sent to Parliament as part of tax law amendments.
The government has faced pressure from various quarters to review key taxation policies, including PAYE, housing levy, and other deductions, to make them fairer and more manageable for citizens.
The Kenya Bankers Association (KBA) recently proposed adjusting PAYE tax bands, suggesting a minimum taxable income of Ksh30,000 and a top rate capped at 30 per cent.
Under the proposal, incomes below Ksh30,000 would be exempt, while higher bands would be taxed progressively up to 30 per cent.
REVEALED: KRA Acquires New Surveillance System For Tax Evaders
