When KRA comes calling, trauma hits

Why did you introduce yourself thus, I asked? He said that since the 1999 drought that had led to massive power rationing in the country as our dams did not have the capacity to generate electricity, mentioning that he worked at KPLC in any social gathering was an emotional trigger that had previously put him in difficulties. So he found it easier to just say that he worked for the government.

Last week I got a text message from the Kenya Revenue Authority (KRA) and started muttering unladylike expletives while frothing at the mouth like a rabid dog.

A colleague saw my reaction and asked what was wrong. When I showed her the text message alleging outstanding taxes with a waiver of penalty and interest if I paid by June 30, she threw her head back and laughed. “Everyone got that message, it’s not just you.”

To be honest, I have my doubts that it went to everyone. The thing is, even if they sent that message to the permanent residents of Lang'ata Cemetery, KRA’s text messages are an emotional trigger to all, dead or alive. Their emails are an emotional trigger. Heck, just seeing their logo on a billboard is an emotional trigger. Just like KPLC was, back in 2000.

I have lost many suppliers who refused to submit invoices issued from KRA’s online system eTIMS, because they want to remain below the radar. I wished them good luck and God speed because I can’t have a whole slew of business expenses disregarded for tax purposes by my auditor as they are not eTIMS issued.

I recently sat in on interviews for an accountant for a friend’s firm and the technical competency questions were not about IFRS (International Financial Reporting Standards ) or basic accounting principles.

No, they were about tax accounting and prior experience engaging in, negotiating for and surviving a KRA dispute with nothing but the shirt on your back.

Today, you cannot hire an accountant who does not know how to navigate within the miasma that is the KRA tax laws and to know when to refer to peers, industry colleagues and the auditor when they don’t understand an accounting issue. Incorrect tax accounting treatment is as fatal as riding pillion with a drunken boda boda rider.

Parliament last week removed the contentious clause in the Finance Bill that would have given KRA access to your personal financial information such as mobile money and bank transactions.

According to KRA chairperson Ndiritu Muriithi speaking at a panel discussion earlier this month, of the 20 million Kenyans registered for KRA PINS, only about 10 million file their tax returns, with six million of the 10 million filing nil returns.

You guys who are not paying taxes are causing absolute grief to the few who do. Because it’s easier for KRA to physically find the tax paying individuals and companies and squeeze them for more, rather than hunt for tax dodgers who operate in the shadows.

According to an OECD (Organisation for Economic Co-operation and Development) report, at 50 percent tax revenue as a percentage of total government revenue, Kenya ranks 5th in Africa, after Tunisia at 80 percent, South Africa at 70 percent, and Morocco at 65 percent.

So from a KRA perspective, there’s still plenty of juice to squeeze from the Kenyan taxpayer orange. In the words of Ndiritu Muriithi at the panel, “The question is where are these 16 million Kenyans? Are they truly outside economic activities and how then can we bring them to participate in financing the state?”

Getting personal mobile and financial transactional data would certainly have been one way to do it since, to paraphrase the ubiquitous wall hanging that graces many Christian homes, KRA is set to become the head of every house, the unseen guest at every meal and the silent listener to every conversation!

The writer is a corporate governance specialist and a former banker. X: @carolmusyoka