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The Kenya Revenue Authority (KRA) wants the government to more than double its budgetary allocation, to at least two percent of exchequer revenues they collect each year, as part of its strategy to boost capacity in its goal to collect Sh28 trillion in five years.
The National Treasury allocated the taxman only Sh22.33 billion in the current financial year, which translated to about 0.9 percent of its total ordinary revenue collections in the last financial year, but KRA says it needs more than double the amount to be able to meet its goals.
Speaking during the national Taxpayers’ Day celebrations at State House Nairobi last week, KRA chairman Anthony Mwaura admitted that the tax collector is choking on underfunding, implying that it cannot even afford to buy toilet paper and printing papers for its staff.
“Our staff are even buying their tissue paper and the printing papers…Our staff are not even able to access medical services,” Mr Mwaura said.
This financial year, KRA estimates that it will need Sh45.1 billion, more than double what it currently provides, to meet its set target of raising Sh3.1 trillion in total revenues.
The majority of the required costs, Sh38.7 billion or 85 percent, is consumed by the taxman’s staff in remuneration and benefits, while the rest is expected to be used for revenue mobilisation, operation efficiency, and management of border processes, among others.
To meet the required Sh20.5 trillion target within the next five years, the taxman will need from the exchequer a total of Sh283.5 billion, of which Sh238.3 billion will cover staff costs for the taxman.
Mr Mwaura argued that meeting the set targets is dependent on getting the required funding, which is at least two percent of the previous financial year’s exchequer revenues collected by the authority.
“The staff have told me, the only year they were given two percent, that was in the year 2020/21, they were able to surpass their tax collections by more than 21 percent,” Mr Mwaura said.
“And they’re saying that if they can be given, between 1.5 to 2 percent, they’re going to guarantee you, even if it means signing with each and every particular employee of KRA, that Sh3 trillion we always keep on saying, will no longer be a mileage, but it will happen.”
In its ninth corporate plan published last month, KRA revealed that negotiating with the National Treasury to raise the allocation to two percent is, however, just one of the resource mobilisation strategies it will employ over the next five years.
The taxman estimates that in the best-case scenario, it will receive only Sh260.1 billion from the exchequer to fund its operations over the next five years, while the remaining Sh23 billion will come from other sources.
National Treasury Cabinet Secretary John Mbadi expressed his support for the push to increase KRA’s allocation, terming it an important move to motivate the taxman’s staff.
“I think this is something we have discussed, and again we will make sure that when we are doing our budgeting, that we feed the cow that we milk so that we don’t milk the cow without feeding the cow,” Mbadi said during the same celebration.
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