Taxpayer death in Kisumu puts KRA approach under spotlight

The KRA Commissioner General faces a similar dilemma, calling into focus the need to revamp its service charter to stop killing businesses literally.

Firstly, return to the twin canons of taxation on elasticity and certainty. Taxpayers need the psychological comfort of knowing that they are valued partners by intentional and responsive policies which create assurance that their businesses can be salvaged from risks of a depressed economy.

Bring back the MG Waweru tax model on tax policy units to cater for remission hardships contemplated under section 20 of the Value-Added Tax Act. This is an effective quick win for struggling taxpayers looking for a turnaround.

The KRA policy regime must consider flexible payment plans to align with the recent Court of Appeal ruling in a tussle with Keroche Industries. Section 5 of the KRA Act gives advisory powers to the Treasury Cabinet Secretary.

Nothing prohibits the KRA from repackaging its tax policies, including restructured payment plans to resuscitate ailing enterprises.

For instance, a while back, banks never used to give loans past three years without sureties; currently, they offer facilities running to 10 years without any security.

There is a need for strategic leadership to re-conceptualise Kenya’s debt burden and interface it with tax compliance.

The pressure to collect more taxes to hedge against risks of debt default must not destroy the industrial economy, resulting in business collapse, shutdowns, relocations, and capital flight.

Equally, staff suffocate under the weight of unrealistic targets when it has a data repository that can be used for informed revenue forecasts.

Again, while tax amnesty enabled KRA to surpass collection targets, such one-off schemes cannot adequately cater to the ever-changing dynamics of tax culture. It must loop in feedback from debt validation to craft long-term reward schemes for the taxpayers.

The concept of endgame is key to crafting a winning strategy. The KRA must take a hard look at set targets, staff attitude and infuse user-friendly policies to restore confidence in the hearts of Kenyan taxpayers.

There is also the lost art of institutional memory in change management. During Waweru era each TSO had clearly defined units for compliance, audit, policy-technical, debt and customer experience.

This sharply contrasts to the irony of bureaucratic nightmare occasioned by technology. A client recently shocked me when they received 5 letters from KRA in a span of 4 days.

To wit, Audit Notice; Special Table warning; TCC withdrawal threat; Agency Notice; and threat of TIMS shutdown. This is the level of uncertainty and anxiety which drives taxpayers to death and depression.

The writer is a lawyer specialised in tax advisory