The Kenya Revenue Authority (KRA) has suspended all tax relief payments to audit and enhance payment of tax refunds, exemptions, waivers, and abandonments-related processes.
KRA noted that the suspension is effective February 28, following concerns from taxpayers.
The concerns have led to the need to restructure rules and procedures governing tax exemptions.
However, KRA has said it will continue to comply with the law by assessing and processing the tax reliefs, but payments will not be disbursed until the end of the process despite the suspension.
KRA Board Chairman Anthony Mwaura has stated that the suspension and ongoing review of tax reliefs is aimed at increasing the impact of tax expenditure on economic growth.
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He said the impact will be achieved through minimizing tax expenditure and aligning it with international best practices for better internal revenue.
Further, the Chairman said the improvement is part of the Government’s strategy to seal revenue leakage and enable KRA to mobilize more taxes towards the country’s economic growth.
“It is also part of the aggressive revenue mobilization plan aimed at enhancing revenue collection and redirecting resources to finance priority growth-supporting programmes,” he added.
The taxman has granted Kes610 billion in tax reliefs and incentives in the last five years with an average of Kes122 billion per annum.
Tax refunds are made to reimburse excess tax paid or remitted in error in a given period and when tax deducted at source is more than the final liability.
The refunds cover value-added tax (VAT), income tax, excise, and stamp duty.
