The Kenya Revenue Authority (KRA) is looking to collect more taxes after the tax changes passed in the Finance Act 2023 for the 2022/2023 financial year took effect from the 1st of January.
During the last budget reading, former Treasury CS Ukur Yatani outlined a raft of tax changes that were to aid KRA realise its revenue collection targets this financial year.
Among the taxes that will go up include the capital gains tax that will increase from 5% to 15% and the reintroduction of excise duty on bank transactions.
"What these taxes will do is give us access to individuals and corporates with high net worth transactions like the ones that trade in land stocks and securities. This will increase their share of tax deductibles," KRA Digital Tax Manager Nickson Omondi told Citizen TV.
With these changes, the taxman is confident that it will reach the Ksh.2.1 trillion revenue collection target set by the National Treasury for this financial year.
"With these new revenue streams we will get to the target that was set for us by the national treasury," said Omondi.
However, according to industry experts, the best that the taxman can achieve with the new revenue streams is the set targets for this year.
"With all the revenue that is coming to KRA the best they can realise is this year's target and not more than that. Talk of doubling tax collections in the next two years is next to impossible if you ask me," Samuel Kumu, a Tax Expert at Rödl & Partner, said.
The re-introduction of the fees on mobile-to-bank transactions and vice-versa comes with an additional tax burden of a 20 % excise duty that will be levied on these transfers.
"This will come out of the transaction cost that is usually charged by banks to consumers and not on the actual amount of money that is being transacted," said Omondi.
Online services will also start attracting 16% VAT, including e-books, and streaming services such as Netflix and Spotify, as well as videoconferencing, following the introduction of the value-added tax regulations, 2022.
