EDITORIAL: KRA must audit tax compliance system

The Kenya Revenue Authority’s conflicting tax assessments on the nominee for the National Land Commission chairman is an important occurrence that raises many questions on the tax compliance system.

Because some top jobs involve public scrutiny through MPs, it can be flagged and generate a lot of interest, the way the NLC position has done. However, there are many taxpayers whose tax records may not be a case of public interest and remain in the custody of KRA.

Granted, slip-ups can occur and mistakes can be corrected. However, it is unbelievable that for an appointment requiring multi-agency vetting, the KRA can get it wrong and then have to make a U-turn on its own position.

Based on this anomaly, the KRA, which has been missing its tax collection targets perennially, ought to institutionalise the zeal it showed in questioning Mr Gershom Otachi’s clearance and harness this to plug the many holes that may be frustrating revenue collection.

While Kenya’s public debt stood at Sh5.8 trillion in June, Treasury chiefs have indicated that the figure will go up by Sh1.84 trillion by August 2022 to Sh7.6 trillion. It is figures like these that continue to put a lot of strain on the taxman, who has lately been pursuing suspected cases of tax avoidance and evasion in the quest to collect the large amounts of money Kenya needs to service its growing debt load.

Although the conflicting compliance assessments are an indictment on the tax agency, it also presents an opportunity for KRA to run a painstaking audit on its tax compliance regime and put a stop to any leakages in its collection architecture.

The KRA cannot afford to operate on a weak system because such porousness heaps a disproportionate burden on compliant taxpayers. We hope this matter will be resolved fast, the systems audited, and the findings made public to allay fears that the tax collector could be contributing to loss of revenue.