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KRA tax refund effeciency among the best in the world

Thexis competing with European tax agencies in tax refunds efficiency, taking 60-90 days compared to the EU’s average of 84 days.

KRA’s tax refund efficiency is significantly better than both global and Africa averages of 23.7 and 27.3 weeks respectively as captured in the PriceWaterhouseCooper’s paying tax indicator released yesterday.

The survey showed that European countries take the least time globally, processing VAT tax refunds within 14.8 weeks with Central American countries taking the longest period of 34.7 weeks. North America, Middle East and Asia Pacific take 23.5, 30.3 and 20.5 weeks respectively.

Jo Bello, Global Indirect Tax Leader at PwC said that the use of technology by tax authorities and businesses, including more real-time reporting systems, help to make VAT refunds more efficient as well as reducing fraud and potentially increasing tax authorities’ risk assessment and identification.

She added that in countries where it takes 27 per cent less time to comply with VAT obligations were those where businesses paid and filed VAT online, showing KRA’s high efficiency rate as the authority launched an online tax platform, iTax, in mid 2013.

The paying tax indicator forms part of the World Bank’s annual ease of doing business and provides suitable insight to investors. Increased ease of paying tax enhances the country’s attractiveness.

This year, the survey sampled 190 economies in the world. Taxpayers in the country have in the past been forced to wait for years to obtain their refunds.

The Kenya Association of Manufacturers chief executive Phyllis Wakiaga acknowledged that tax refunds to her members had improved tremendously since last year when the taxman reviewed its policy.

The National Treasury early this year confirmed that it had disbursed up to Sh15 billion to KRA for the settlement of the tax refunds back log spanning two financial years.

National Treasury CS Henry Rotich went further to urge KRA to ensure quick facilitation to enable tax payers, especially manufacturers, have enough liquidity for their businesses.

KRA Commissioner General John Njiraini explained that the iTax system has increased the agency’s efficiency, processing Sh1.2 billion in tax refunds per month, taking only 60-90 days to process claims.

Even so, a twitter poll conducted by this writer seeking to establish whether members of the public effectively receive their PAYE and VAT refunds revealed otherwise.

A whopping 90 per cent of the respondents claimed that they had never received their tax refunds, even after providing their account numbers as requested by KRA after filling tax returns. Only 13 of 130 respondents said that they had received their refunds.

Revenue collection in FY 2016/17 reached a new record with Sh1.365 trillion compared to Sh1.210 trillion collected during the previous financial year.

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