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Kenya To Concentrate On Tax Compliance, Reforms

07 May 2013   (0 Comments)
Posted by: Author: Lorys Charalambous
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Source: Lorys Charalambous (, Cyprus)

In its Letter of Intent to the International Monetary Fund in the context of its request for financial support, the Government of Kenya has described the measures to strengthen tax revenues it intends to implement for the remainder of 2012-13 and in 2013-14.

It is expected that continued fiscal discipline will allow for a further improvement in Kenya's public debt to gross domestic product ratio, at the same time as the Government pursues its long-term development strategy.

Mobilizing additional revenue is to be a key priority, and, in that regard, the Government has promised to strengthen value added tax (VAT) audit functions which should lead to enhanced compliance by large taxpayers (with fifty of the 100 largest VAT taxpayers being audited by end-June 2013); enforce measures towards improving tax collection from rental and real estate activities; implement an automated excise tax management system to eliminate possibilities of mis-declarations in 2013/14; and make the recently-approved excise tax on mobile financial transfers operational.

The Government also plans to seek urgent approval of the new VAT bill, which should simplify and modernize the tax's administration, and broaden its tax base by limiting zero-rated and exempt supplies.

Finally, progress will continue to be made on Kenya's structural tax reform agenda, by undertaking a comprehensive review of the Income Tax Act and the Customs and Excise Act, and by revamping the country's natural resource tax framework as Kenya is poised to become a significant producer of oil, gas and minerals.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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