KRA puts tax cheats on notice as coronavirus break lapses

Tax cheats should brace themselves for a return of stringent measures that include property seizures and attachment of bank accounts as the Covid-19 break offered by the Kenya Revenue Authority (KRA) comes to an end.

The taxman says it will, from tomorrow, start enforcement action on individuals and firms with outstanding tax arrears in efforts to boost its collections.

The agency had given taxpayers up to today to either clear their arrears or strike deals on new payment schedules in the wake of Covid-19 outbreak.

“All taxpayers with outstanding tax liabilities and have not paid or entered payment plans must do so by June 20, failing which appropriate enforcement measures will be instituted against the outstanding debt….,” KRA Commissioner for Domestic Taxes Department Elizabeth Meyo said Firday.

TAX ARREARS

The move is the latest bid by the taxman to net mounting tax arrears, which stood at Sh192 billion in June 2017.

The taxman has apparently hinged the aggressive action on the Tax Procedures Act of 2015, which empowers it to seek taxes directly from third parties like banks, employers and suppliers as well as seize and auction property to recover unpaid tax.

The Act also gives the KRA powers to freeze tax cheats’ property transactions and ultimately auction the assets to recover the unpaid tax in addition to deducting the penalties and tax dues from workers’ salaries.

Last month, a bench of three appellate judges upheld sections of the Tax Procedures Act, which were nullified two years ago, restoring KRA’s power to spy on tax cheats, raid their premises and attach their property.

TAX PROCEDURES ACT

 By restoring Section 60 of the Tax Procedures Act, the Court of Appeal effectively handed back KRA its power to compel third parties to share information with its officials. KRA can therefore seek financial transactions from third parties like banks, mobile telephone firms and schools.

KRA has over the years failed to hit revenue targets set by the National Treasury. KRA collected Sh1.44 trillion in the 2018/19 period, falling short of the Treasury-set target by Sh72.7 billion.