KRA to award Ksh.500k to tax cheat whistleblowers in new proposal

Kenya Revenue Authority. [Photo courtesy]

Kenya Revenue Authority (KRA) will reward of Sh500,000 to anyone who whistleblows on tax cheats be it individuals or businesses, a new Bill prescribes.

The reward mechanism is contained in the Tax Laws Amendment Bill 2020. The current Act does not give any provision for a monetary award once information on those who breach tax law is shared.

KRA currently pays anyone who shares information on cases of breach of tax law five percent of the “recovered unassessed taxes of a maximum of Sh2 million.”

KPMG, an audit and consultancy firm in its assessment of the proposals tabled before Parliament said according to Business Daily “This provision will only apply where KRA has not awarded the informer for identification of unassessed duties taxes or recovery of unassessed duties or taxes.”

It added: “The proposed amendment will provide an additional incentive for persons to provide information to KRA on tax defaulters.” 

This move is aimed at nabbing tax cheats who are mostly wealthy individuals and entities linked to persons of high net worth.

The taxman through the enforcement unit has been following bank statements, databases, import records, electricity bills, motor vehicle registration among other things to crack down on those who evade tax.

This follows an order by President Uhuru Kenyatta to the authority to ensure that every Kenyan pays tax upon the realization that some companies failed to pay taxes or underpaid.

KRA has come under fire in the recent past for failing to hits tax collection targets. KRA Commissioner-General James Githii Mburu last year in August said Kenyans richest individuals evaded tax to a tune of Sh250 billion.

Mburu said he will stop at nothing until the tax evaders pay their dues to the government saying “tax evasion is bleeding this country to death”.