The Kenya Revenue Authority (KRA) is set to conduct a census of landlords’ properties and seek direct access to M-Pesa transactions in a bid to catch tax cheats and raise an additional Kes 375 billion for the year starting July.
The Treasury has disclosed in its budget planning document for the new fiscal year that the KRA’s tax system will be integrated with those of telecommunications firms.
The integration will offer the authority unrestricted access to taxpayers’ bank and mobile money accounts as part of the efforts to catch tax cheats and improve revenue collection as its targets continue to rise.
The taxman will conduct a census of rental properties and link its tax system with the digital land registry to smoke out landlords not paying their full share of taxes.
Landlords with annual rental income of between Kes 288,000 (Kes24,000 per month) and Kes 15 million (Kes 1.25 million per month) are required to file a monthly tax return declaring the gross earnings rent from which tax payable is computed at the rate of 10 percent.
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“Implementation of rental income tax measures by mapping rental properties. This will be achieved through enhanced field data analysis mopping up, integration of itax with the National Lands Information Management System and use of a mobile App,” the Treasury said.
The KRA is buying a geographical information system (GIS) that will help map all the buildings in the country.
Further, KRA is racing to bring more people into the tax bracket and curb tax cheating and evasion in the quest to meet targets.
The Treasury wants the KRA to collect Kes 2.566 trillion from taxes in the year starting July from the forecast Kes2.191 trillion, representing an extra Kes 375 billion.
This will help the State meet its ambition of reducing the reliance on borrowing to fund the budget. It seeks to raise Kes743.3 billion in the next fiscal year from the current Kes877.3 billion.
“KRA will implement, among others, the following measures…integration of the KRA tax system with the Telecommunication companies,” said the Treasury.
The M-Pesa records will help the State identify individuals and firms whose tax payments are not in tandem with the cash moving through their mobile phones.
The unfettered access to M-Pesa will spare KRA the burden of having to seek court orders every time it wants to access an individual’s account but tax experts and lawyers have warned of fierce legal opposition to the invasion of people’s privacy.
