Companies which use the internet should pay taxes to KRA

Companies which use the internet should pay taxes to KRA


The Kenya revenue Authority presentation in Parliament has revealed that companies that use the internet are not paying taxes. Since the inception of globalization anybody and anyone can transact business anywhere in the world. This has come with challenges of Government taxing these companies. And it seems it is proving difficult to net these companies. The Kenya Revenue Authority is seeking the right to access individual and companies’ mobile money transactions in a new war against tax cheats. The plans are part of the authority’s plan to expand its tax payer base by roping in individuals and businesses trading at the retail level. The initial plan targets merchant transactions, the taxman will be able to see deals in over 36,000 active till numbers, according to the latest data from Safaricom. The Lipa Na M-Pesa service  transacted over  Sh15 billion, indicating a huge opening for KRA to seize tax evaders. The information transacted will be fed into KRA's Data warehouse and business Intelligence (DWBI) system. That way many business people who use the internet will pay taxes and KRA will realise its targets. One Taxi company was seen to be paying peanuts to the taxman while reaping billions from Kenyans. Some of those who use internet to do businesses are based outside the country. Tax works on disclosure and good faith. The taxman is far off the target, having missed the mark by a massive billions. The persistent failure to meet revenue projections has come with far reaching ramifications for the economy. The country has been compelled to borrow heavily from the local and international markets, a scenario that has partly sparked the current row over controlling lending rates. Because of the huge budget deficits, the Treasury has been disconcertingly piling debts and it had surpassed its annual domestic borrowing target by billion with net domestic borrowing ranging in billion. How is it possible that a largely manual KRA, with fewer taxpayers, less economic activities, and fewer income sources was able to surpass the target by such a high margin in 2011? Was the Treasury target too low? Have the country’s top economists been setting unrealistic targets for KRA?The authority,  hopes the move will boost its financial data gathering scheme  to unearth income sources which have not been declared in tax returns and demand full compliance. KRA will also offer employment opportunities to the youth. Kenyans are paying taxes heavily every month and it is not prudent for companies which are doing business in Kenya to evade tax. Let Safaricom help KRA realize tax targets so as to revamp our economy.

By

Veronica Onjoro

Mombasa

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