Telcos next in line on taxman’s real-time transactions surveillance plan

Telecommunication companies are next in line to have their systems subjected to the scrutiny of prying tax authorities in line with proposals outlined in the draft budget policy which accords Kenya Revenue Authority access to transactions on electronic platforms in a bid to broaden its scope and drive up receipts.

KRA is increasingly resorting to monitoring companies’ digital systems to ascertain that it is getting optimum collections with the taxman facing amped urgency to hit and even surpass revenue targets to dial back the government’s reliance on borrowing to fund the national budget.

Speaking during International Customs Day on Thursday, KRA Commissioner-General Githii Mburu implied that the exchequer will parse the data gathered from telcos’ daily transactions to pick out individuals and businesses who earn and withhold such information from the taxman.

“We are looking at telcos themselves; the revenue and transactions they generate and the taxes we should be collecting from those transactions.

“We are also going to use that data on individuals and businesses who’ve been making money and [who have] been escaping our dragnet,” said Mr Mburu.

The KRA boss was bullish that the new intrusive approach would bear fruit as seen in the betting sector where the organization has recorded considerable revenue gains in roughly two weeks when it has been in place.

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“The technology we are implementing right now, [we’ve already integrated] with the betting sector for daily remittance of revenue, but more importantly, to have more visibility of all transactions happening in that space so that we don’t rely on self-declarations from traders.

“We want to see it live. They [should transmit] information daily so that we can see it,” he said.

Alive to the revenue demands by the National Treasury and the set target of Kes3 trillion for the next financial year, Mr Mburu said that intensifying tax collections would ease the budget on government borrowing.

Safaricom CEO Peter Ndegwa has no qualms about KRA going hard on tax scrutiny as long as it is within the law.

In an interview with Citizen TV Thursday night the head of Kenya’s biggest telco emphasized the need for KRA to breakdown the implications of the new tax regime for players in the industry.

“We need to have a conversation with the KRA and understand the implications of the new proposal and understand our role in that.

“But what I know is that we are going to pay the tax we are required to pay. Of course, KRA may want to do additional of how we do taxes, but that has to be done through the budget process and the parliamentary process,” Mr Ndegwa said.

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