1 Kenia - English
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Transcript of 1 Kenia - English
KENYA REVENUE AUTHORITY
CIAT TECHNICAL CONFERENCE
Presented by
Pancrasius Nyaga
COMMISSIONER OF DOMESTIC TAXES
LARGE TAXPAYERS OFFICE
AMSTERDAM, NETHERLANDS OCTOBER 2012
TITLE: ‘SMART COOPERATION’
COOPERATION AS A TOOL IN COMPLIANCE RISK MANAGEMENT STRATEGIES
1.0 INTRODUCTION
Kenya Revenue Authority (KRA) is a Semi-autonomous State Corporation under the Ministry of Finance established in 1995 by The State Corporations Act Cap 469 of the Laws of Kenya.
KRA is charged with the responsibility of collection, accounting for and administration of Government Revenue(s).
The governance structure comprise of:
Board of Directors
Commissioner General
Six (6) Commissioners as departmental heads
PREAMBLE TO COOPERATION
Challenges
Non filers
Late payments
False declarations and fraudulent tax refund claims
International tax issues-Transfer Pricing
Unreliable tax agents
Limited automation (Manual processes)
Opportunities
Political & Legal environment
Stakeholders (Competitors, Regulators, Whistle blowers, etc)
Automation-appreciation (ITMS)
Voluntary disclosure-Self assessment
Staff motivation- professionalism, integrity, etc
2.0 ENHANCING EFFECTIVE COOPERATION
2.1 International Scene
Membership to International Tax Bodies e.g. CIAT, CATA, OECD, ATAF, etc
Tax Information Exchange Agreements (TIEAs)
Double Taxation Agreements (DTAs), including MAPs and APAs
Transfer Pricing Legislation-based on arms length principle
Regional Authorities Technical Forum (EARATC) affiliation
2. 2 Domestic Scene At the Domestic level, KRA cooperates with various
stakeholders as follows:
(i) Public Institutions
Registrar of Companies
Registrar of persons
Ministry of Foreign affairs
Ministry of Finance & Public Procurement Oversight Authority
Department of Mining and Geology
Anti-Corruption Agency (EACC)
2.2 Domestic Scene Cont……
(ii)Tax Intermediaries e.g. Auditors/Tax Agents-Enhance compliance and information exchange with TPs (clients)
(iii) Regulatory bodies (CBK, ICPAK, CMA, IRA,ERC, etc)
(iv) Utility Companies (KPLC, NWSC, etc)
(v) General public (whistle blowers vs reward schemes)
Benefits of Cooperation
(i) Reduced cost of compliance
(ii) Improved service delivery to Taxpayers
(iii) Enhanced voluntary Compliance
(iv) Reduction in tax evasion and frauds
(v) Enhanced revenue performance (Kenya-US$ 1.99 B 2002/03 to US$ 8.54 B 2011/12)
(vi) Improved image of KRA
IMPACT OF INCREASED REVENUE COLLECTION
IMPROVEMENT IN INFRASTRUCTURE
IMPACT OF INCREASED REVENUE COLLECTION
IMPROVEMENT IN INFRASTRUCTURE
3.0 SMART COOPERATION
Modern Approach
Various reform initiatives that have improved compliance risk management processes include:
• Online processing of Tax Compliance Certificates
• Automation of business processes-collaboration of information
• Excise stamps management-Spirits & Tobacco industries
• Online data validation & reconciliation of revenue
KRA ONLINE SYSTEMS
NO SYSTEM SUPPORT
1 Integrated Tax management Systems
(ITMS)
• Registration
• Filing
• Revenue reconciliation
2 Common Cash Receipting System
(CCRS)
• Online processing of payment receipts
3 Electronic Cargo Tracking • Online monitoring of transit cargo
4 Flow Meters • Aligning declarations to flow meter
readings-Spirits industry
5 GPRS enabled Electronic Tax
Registers
• Online monitoring of sale transactions
6 SIMBA • Linking document lodgment, processing
clearing and payments
7 Vehicle Management System (VMS) • It enhances registration and transfer of
motor vehicles
4.0 KEY ELEMENTS FOR SMART CO-OPERATION
Key enablers of cooperation between revenue administrations and other stakeholders include;
• Automation
• Legislation
• Political goodwill
• Professional staff with high integrity
5.0.CONCLUSION
Many challenges face revenue authorities hindering achievement of their full potential in revenue collection.
However, revenue administrations should put more focus on the various opportunities available to them.
Focus on effective engagement through Smart cooperation is key to the success in enhancing compliance risk management. This ultimately leads to enhanced revenue collection among other benefits.