Lawmakers have asked National Treasury Cabinet Secretary Ukur Yatani to form a national taskforce to review the national tax systems at the Kenya Revenue Authority (KRA) to check against revenue loss through leakages.
This even as the National Assembly Finance and National Planning Committee launched investigations into the cause of declining national revenue performance by KRA following a request from nominated MP Godfrey Osotsi.
Osotsi, in his statement, wants the National Treasury CS to provide a report on the status of investigations of senior KRA officials alleged to be engaging in tax fraud.
The Homa Bay Woman MP Gladys Wanga led committee, is also required to confirm whether the KRA management ordered a thorough and professional lifestyle audit on its senior staff, including commissioners.
In a report before the National Assembly, the Public Accounts Committee (PAC) has recommended that the taskforce submits a report to Parliament within three months and should oversee the development of a national tax policy based on equity and fairness, flexibility, economic growth and efficiency.
“[That] the CS ensures that effective and efficient revenue collection administration and systems that boost revenue collection, recognize, and support taxpayers as partners in national development are in place,” reads part of PAC report.
PAC report on the audited accounts of the national government for the 2017/18 financial year will be debated by the MPs who will either approve or reject it.
But even as the investigations get under way, the PAC report paints a gloomy picture of the country’s revenue collection.
During the 2017/18 financial year, the country experienced a revenue shortfall of Sh124.58 billion, which is 8.3 per cent of Sh1.54 trillion the National Treasury had projected KRA to collect during the year under review.
The watchdog committee’s report further observed that the arrears of revenues have continued to grow from Sh194 billion in the 2016/17 financial year to Sh305.9 billion in the 2017/18 year.
“The significant arrears of revenue due and uncollected undermine the principle of equitable sharing of national revenue between the national government and counties,” the report says.
Osotsi argued that the declining national revenue performance that has led to exchequer and budgetary challenges at the national and county governments is a concern to the country.
“Could the CS confirm whether any organizational and managerial challenges being experienced at KRA have contributed to the revenue decline,” said Osotsi in his request for a statement.
The nominated MP also wants the CS to furnish the Ms Wanga-led committee with a detailed list of all top management positions at the country’s revenue agency.
To get to the bottom of the matter, the first time legislator says the list should indicate the positions, names of current holders, county of origin, ethnicity, academic and professional qualifications of holders and number of years of service.
Wanga’s committee is further required to report to the House details of how much revenue the country lost following the recent migration of ICT Platform from Legacy Environment to iTax.
How the loss was mitigated is a matter to be established by the committee as well.