tax
tax

Kenya plans to seek international collaborations in order to curb cross-border tax avoidance schemes, a senior government official said on Wednesday.

Henry Rotich, cabinet secretary for the National Treasury, told journalists in Nairobi that multinational companies which predominantly operate and make profits in Kenya continue to use sophisticated schemes to avoid or significantly minimize their tax obligations in Kenya.

“We shall therefore establish close collaboration globally, especially in taxation in order to eliminate cross-border tax avoidance schemes,” said Rotich.

Rotich said that Kenya also plans to increase utilization of multilateral exchange of information provisions in order to tackle transnational tax evasion.

He observed that in order to meet its revenue targets, the tax administrators will rely on a facilitative approach, which depends on creating an environment for the taxpayers to voluntarily comply with the law.

The government official noted that the country is seeking to expand the current tax base by raising the number of active taxpayers from 3.94 million to 7 million by implementing a segmented approach to deal with the identified sectors.

Rotich said that the government is set to raise revenue to gross domestic product ratio from the current 18.3 percent in 2017/18 to 19.2 percent in 2020/21.

John Njiraini, commissioner general of Kenya Revenue Authority, said that through the use of alternative dispute resolution, Kenya can speed up resolution of tax disputes and free revenue held up in dispute.

Njiraini said that Kenya’s unemployment challenge has been blamed on sluggish growth of formal sector jobs and this has led to the informal sector creating the bulk of employment opportunities.

“This calls for us to innovate ways of expanding the tax base to increase compliance levels in the informal sector,” he added. Enditem

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