Kenya to expand tax base to boost domestic resource mobilization

Central Bank of Kenya (CBK) Governor Patrick Njoroge displays some of the new look shilling Kenyan currency notes on June 3, 2019 during a press conference at his office in Nairobi. - The unveiling of the new Kenyan bank notes has been greeted by some with disapproval, with Kenyans taking exception to the use of an image of a statue of the founding father Mzee Jomo Kenyatta printed on the notes. According to the 2010 Constitution of Kenya, notes and coins shall not bear the portrait of any individual. (Photo by SIMON MAINA / AFP) (Photo credit should read SIMON MAINA/AFP/Getty Images)
FILE PHOTO: Some of the new look shilling Kenyan currency notes on display. (Photo credit SIMON MAINA/AFP/Getty Images)

Kenya plans to expand its tax base in order to boost domestic resource mobilization, an official said on Monday.

Francis Muthaura, chairman of Kenya Revenue Authority (KRA), said that the country is seeking to raise the number of active taxpayers from 3.94 million to 7 million by the year 2022.

“The tax base expansion focuses on tapping into the potential provided by technology to identify and bring into the tax net, Kenyans who are engaged in gainful business and who ought to be paying tax but are not,” Muthaura said during the launch of 2019 taxpayer’s month.

He said that through technology investments, the revenue agency will provide easy mechanisms for tax payment and access to its services.

“These investments are fundamental to our revenue enhancement strategy, in order to reduce dependence on foreign donors,” said Muthaura.

He observed that tax collection remains a challenge due to the presence of a large informal sectors that are difficult to tax in an efficient manner.

Muthaura said that through the use of appropriate third party data, Kenya will ensure that all eligible residents pay their rightful share of taxes to fund provisions of public services.

KRA is also collaborating with counties to collect revenues on their behalf and to generate more revenue from county suppliers.