KRA to miss target by over Kshs.20b

The Kenya Revenue Authority will miss this financial year’s target by over 20 billion shillings following what the taxman calls policy and administrative measures by the government.
KRA Commissioner General John Njiraini says the authority was expected to raise slightly over 733 billion shillings in the year but with the current macroeconomic environment the authority will only achieve 712 billion shillings.
At the start of the 2011/2012 financial year KRA targeted to raise 733.4 billion shillings a growth of 15.5% over 2010. Kshs.696.9 was to be raised as exchequer revenues and 36.5b as agency revenues.
However as a result of interventions taken to address the cost of living such as reduction of duties and taxes on petroleum and food products, these targets have been hard to meet as petroleum taxes witnessed a reduction of 2.5%.
The taxman is now urging parliament to quickly enact the proposed VAT bill which is expected to significantly scale down exemptions and zero ratings.
The discontinuation of withholding VAT has also affected collections of indirect taxes which declined by 3.3%.
Withholding tax alone accounts for 10% of VAT. This comes even as the taxman sounds alarm on declining collections from taxes on beer.
KRA says beer collections are coming down as consumptions shifts patterns with demand increasing for non taxed non malt containerized brands of beer.
To bridge the deficit in the future KRA is now targeting the booming real estate market to ensure property developers and landlords file accurate tax declarations. KRA collected Kshs.160.4b in Q3 meaning the months January to march and targets 213.4b in 4th quarter.