President Uhuru Kenyatta has issued a strong warning against tax evasion saying the government will not hesitate to punish those cheating on tax.
The President said the government won’t allow few individuals to continue paying less than what they should to the taxman.
He reiterated that the state is constrained in offering services to all when some of its citizens fail to meet their tax obligations.
“For far too long, tax evasion has been glorified in Kenya. Far too many Kenyans feel justified in cheating the taxman, in paying less than they should into the public coffers.
“Yet, despite this behaviour, they still expect world-class roads, quality healthcare and education, and other public services; not appreciating the fact that those public goods and services are paid for out of Tax Revenues,” the President said.
President Kenyatta spoke at a Nairobi Hotel when he presided over the 16th annual taxpayers luncheon organized by the Kenya Revenue Authority.
At the ceremony, also attended by Deputy President William Ruto, various organizations were awarded for outstanding tax remittances.
Safaricom won the top honors in the large taxpayers category while Premier Kenya and Paramount Chief led in the mid and small taxpayers categories respectively.
The President said tax evasion will be dealt decisively and directed relevant state agencies to enforce the law in ensuring tax cheats are punished for their criminal activities.
“In all other cases, and, in particular, where there has been tax evasion or other criminal conduct, the law shall and must follow its natural course,” the President said.
He commended the KRA for the ongoing crackdown on tax evasion saying security services will continue arresting and prosecuting officials of the tax agency aiding the crime.
“Tax evasion will be fought on all fronts. My call is on all taxpayers to voluntarily come forward and regularize their tax positions, rather than await the coming storm,” said the President.
The President, who gave the new tax tribunal three months to resolve pending disputes, challenged the judiciary to expedite tax disputes before the courts of law.
“Both the taxpayer and the tax authority deserve quick and efficient hearings so as to know the outcome of their cases, within the shortest time possible,” President Kenyatta said.
He advised KRA to consider deployment of alternative dispute resolution mechanisms to assist in timely resolution of disputes outside of the lengthy and expensive judicial processes.
“There is no need to frustrate an individual who has made minor mistakes. Someone could have made mistakes but sit down and agree. Don’t weaponise KRA let us not criminalise people,” the President told KRA officials led by Board Chairman Francis Muthaura and Commissioner General James Githii Mburu.
To strengthen the country’s tax administration regime, the President directed the National Treasury, KRA and the Attorney General, to kick start a review of tax laws with a view of creating a robust legal framework that will aid efficient collection and administration of national revenues.
As part of the reforms, the President directed the three agencies to draft a bill and submit it to the cabinet in the next four months.
“In addition, the Authority (KRA) must be empowered to impose greater accountability in terms of fines and liability, for taxes with respect to professional advisers and agents, who provide assistance for or enable the deliberate non-payment of taxes,” the President recommended.
President Kenyatta put on notice heads of institutions who fail to remit statutory deductions saying government will start by punishing non-compliant parastatal bosses.
“Can you imagine someone has worked for the whole month and has been deducted Pay as You Earn then the boss fails to remit the same to relevant authority. You have stolen from two people, the government and the junior officer,” the President said as he assured Kenyans that action will be taken against such officials.
DP Ruto said the sovereignty of any country is determined by the capability of its citizens to pay taxes to meet its development needs.
KRA chairman Amb. Francis Muthaura and Commissioner General James Githii Mburu also spoke at the annual event.