CASHING IN
…KRA to collect US$9.2m more after raising tax
NAIROBI- The government expects to collect an additional Sh10 billion this financial year after it raised tax on some 31 products beginning October 1.
The Kenya Revenue Authority (KRA) said even though it had considered the fact that businesses have been hit by the Covid-19 pandemic since the beginning of the year, it had to adjust excise duty on the products, to avoid a situation where the rising inflation rate affects the country’s revenues.
Among the products that were slapped with the additional tax include alcoholic products, cigarettes and fuel.
The authority said it had also suffered setbacks during the pandemic period, after other countries that trade with Kenya placed various restrictions.
“We expect annually to collect an additional about US$9.2m from adjustment of excise duty rates. Of course we appreciate the fact that there are other factors affecting consumption in this financial year and that adjustment has also been considered,” said KRA’s domestic taxes deputy commissioner for policy and tax advisory Caxton Masudi.
He said the authority had noted the impact Covid-19 restrictions such as ban on travels, opening of businesses and the curfew had on businesses, which affected its collections for the first half of 2020.
“There have been some significant implications to businesses relating to Covid-19 especially in relation to the measures the government has put in place to fight the disease,” Masudi said, but adding that the authority’s revenues had increased since reopening of the country began.
“In the last three months, KRA’s tax performance has improved from 82 to 91 percent.
This is a pointer to improved business environment,” the official said.