Gathige wrote:The best point to capture tax is at source of income. This is also the most efficient and cost effective point devoid of kick backs. Tax collection through fishing when you catch a suspect and they try to deduce the tax due is counterproductive in the long run.
Seconded.
Also I like KRA's method of collecting a flat rate of 10% on rental income up to a certain threshold. Has really streamlined things. If only they could get rid of the cumbersome ITAX app and create one that is straightforward and time saving. Filing rental income returns on ITAX is like trying to put together a jigsaw puzzle.
Some free advice to Unyee if he wants to curb corruption in Kenya and make KRA revenues soar big time overnight
1. Expand the need for KRA PIN to
almost everything in order to widen the tax net. Want your child to join std 1 - toa KRA pin, want to access any single government service; toa PIN, Want to get married, toa PIN. Want your water or stima connected, toa PIN. You get the point.
2. Huge sums of bank balances in any account (say cash balances of over kshs 100 million) should be automatically flagged and deposits into said account subject to scrutiny/reporting by the bank on a monthly basis.
3. Since 90% of the Kenyan economy is informal. Tax at a flat rate per individual/business instead of applying taxes progressively as is done in the formal sector. I hear Nairobi County is switching to this. If this is so, this is a masterstroke. Instead of hoping say a kiosk owner will report all their income (they wont) better to charge them a flat rate fee based on anticipated revenues for the year. E.g 25,000 kshs flat tax for a kiosk owner, but payable in installments. If they claim they did not generate enough revenue to meet the minimum bogey, let them prove it with their receipts, bank deposits, MPESA records etc in order to get the correct assessment.
4. Impose a 50% "unexplained income" tax on bank accounts. If someone makes a 50m cash deposit using gunias in a single day and has no convincing paperwork to prove where they got it. Tax it at 50% while investigations go on, or until the person proves the source of income.
5.Require a KRA PIN and KRA tax compliance certificate for every Kenyan flying into the country from abroad, as part of the entry requirements. This will net all diaspora tax evaders overnight (there are millions of them).
6. Lifestyle audit an absolute MUST for every public servant, in which assets and incomes are explained and audited in depth.
100% tax imposed on any unexplained assets or resources.
7. Conviction by a court of law for grand corruption above a certain threshold (say 1 million kshs) should
automatically lead to a 50% gross tax on any and all assets the invididual owns,
whether or not they were part of the proceeds of corruption.
8. KRA should pay people 10% of taxes netted on giving information that leads to the netting of a tax evader. Let's say your neighbour has an illegal duka next to you and you report them to KRA, if KRA captures 50,000 kshs worth of lost tax revenue, you will be paid kshs 5000. Make being an informant a full time job for the millions of unemployed youth around the country.
9. Parade grand corruption convicts in handcuffs and in their underwear up and down Kenyatta Avenue once a week
and broadcast live on all TV stations, before promptly returning them to Kamiti, then repeating the same the next week until the sentence is complete
Hayo tu