KRA Board Members Present,

Chair Persons and CEOs of Various Organisations,

Summit Panellists,

Distinguished Delegates,

Distinguished Guests,

KRA Staff,

Ladies and Gentlemen

It is my pleasure to join you today as we conclude the 2021 Annual Tax Summit. As we are all aware, this event is part of the ongoing 2021 Taxpayers’ Month activities.

For the last six years, we have significantly transformed the tax summits to focus on taxpayers’ needs. The Summit has evolved from a three-hour session in 2015 to the current two-day engagement sessions.

This year’s Tax Summit was aptly themed “Redefining the Taxation Landscape: Global trends, development and impact”.

Taxation is the largest source of government revenue and therefore, plays a key role in financing various sectors including education, health, and social amenities budget. The mobilization and administration of taxes is therefore critical in the development of our country.

As a tax administration, we are cognizant of the fact that we are operating in a challenging environment when the world is facing the devastating effects of the global Covid-19 pandemic.

I sincerely thank the panellists for the great ideas and recommendations they shared during the sessions.  I also thank the delegates for taking time to engage with one another in such significant topics concerning taxation in this country.

I acknowledge the recommendations made during the two-day deliberations on a wide range of issues revolving around the emerging trends in matters taxation.

Key among the recommendations is the need to ensure simplicity and tax certainty of policy, regulatory framework and processes in tax administration. I take note of your commendation that national policy should seek to align the contradicting sectoral policies to enhance coherence. It should also interrogate the expenditure with the intention of creating surplus build up from tax collection.

 I affirm that simplification of tax policies can provide a predictable environment for investors and create opportunities that attracts long term investments. We will therefore continue working closely with the National Treasury and all our stakeholders to ensure that tax policies are simplified to enhance our processes and improve tax compliance. 

Another recommendation is the need to widen the tax base by looking into other sectors to avoid the risk of overtaxing three major sectors which include manufacturing, banking and insurance and ICT.

This input is invaluable especially at a time when Kenya is implementing strategic tax base expansion initiatives aimed at improving revenue collection through exploration of nascent sectors of the economy.

Through the Tax Base Expansion strategy, the Government is focusing on bringing into the tax net 2 (two) million taxpayers by the end of the Financial Year 2023/2024. An addition to the current number of active taxpayers, which stands at 6.1 million. The Digital Economy is among industries that were earmarked in the Tax Base Expansion drive and is currently chargeable on services offered within the country by non-resident companies via the digital market place.

Another key recommendation during the sessions is the need to ensure minimum cost of compliance to ease tax burden from compliant taxpayers while changing the attitudes of the non-compliant taxpayers.

As recommended on the floor, minimum cost of compliance can be achieved through implementation of best practices including enhanced service delivery. This includes fast tracking of refunds, transparency in the administration of incentives, ensuring high levels of integrity and better application of risk assessments. I am proud to report that KRA has continued to invest on both human and technological resources to drive improved service delivery to reduce the cost of compliance.

We further appreciate the suggestion on stakeholder engagement and the focus on taxpayer’s feedback. I would like to assure you that KRA is committed to listening to our customers. To this end, we have in place structures and systems to enable us optimise these engagements.   For instance, as part of our strong Stakeholder Engagement Framework, the Tax Summit is one of KRA’s platforms for public and private sector dialogue. In addition to many other events, KRA is able to get real-time feedback from stakeholders. 

Ladies and gentlemen,

Several recommendations were made towards relooking at the issues that Kenyan raised towards the OECD Inclusive Framework. Kenya is taking part in the ongoing discussions which are aimed at arriving at a global consensus on how to address the challenge of tax and digitalisation of the economy under Pillar 1 and Pillar 2 of the inclusive framework. These are aimed at gaining new taxing rights that will allow developing countries to collect more tax revenue from the largest and most profitable Multi National Enterprises.

The Authority has raised concerns in different forums over the proposal made under BEPS Action 1 (Addressing the tax challenges of the digital economy) that limits the payment of digital tax to multinationals with a global revenue of £750M and above. This high revenue threshold will limit the number of multinational companies that would qualify to pay digital tax in source countries like Kenya. The Authority has proposed that the revenue threshold should be lowered to allow developing countries to be able to benefit from the digital tax paid by multinational companies.

I also note the recommendation made to leverage on inter-agency cooperation in the fight against Illicit Financial Flow (IFF). Kenya approved Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) in December 2019 and ratified it in June 2020. MAC has been in effect from 1st January 2021 and currently implementing exchange of information under MAC for over 120 countries that are signatories to the MAC.

Ladies and gentlemen,

I believe that the deliberations we have had during these two days will enable KRA to invest in other avenues to meets its mandate as well as facilitate the Authority to meet its obligations. KRA has taken your recommendations seriously and our team will work towards implementing them.

In conclusion, I would like to reiterate KRA’s commitment in engaging stakeholders and listening to their views. We thank you all for making time to attend this year’s Tax Summit, and until we meet again in the next edition, I wish you all the best.

I now invite the KRA Board Chairman to officially close the 7^th Annual Tax Summit.

God bless you. God bless Kenya!             

Mr Githii Mburu

Commissioner General, KRA