Unease as KRA sets up tax office in Eastleigh

Times Tower

Times Tower, Kenya Revenue Authority (KRA) head office in Nairobi. 

Photo credit: File | Nation Media Group

What you need to know:

  • The taxman is already scouting for an appropriate building to host its operations in the suburb.
  • The move is expected to stir anxiety among traders in Eastleigh.

The Kenya Revenue Authority (KRA) is set to open an office in Eastleigh, one of Nairobi’s largest business hubs, as it intensifies its push for tax compliance.

The taxman is already scouting for an appropriate building to host its operations in the suburb that is popular with traders in household items including clothing and textiles, electronics and electrical appliances, footwear as well as foodstuffs.

A document seen by the Daily Nation shows that KRA will lease office space for six years as it seeks to maximise revenue collection in the hub.

The move is expected to stir anxiety among traders in Eastleigh who have previously fought off claims of tax evasion.

KRA has in the past carried out raids on suspected tax evaders in the business hub, confiscating undeclared items and counterfeits worth millions of shillings.

Insiders at KRA told Daily Nation an office in Eastleigh would boost efficiency in tax monitoring and collection.

This comes at the taxman rolled out a series of new surveillance systems that will hand the State real-time access to financial data including sales returns for scrutiny.

As part of the intense tax compliance drive, KRA announced installations of flow meters and CCTV cameras in alcohol factories — guaranteeing the State round-the-clock information on the operations of manufacturers to curb tax evasion.

KRA also announced that all electronic tax registers machines are required to be connected to its systems for monitoring daily sales on a real-time basis.

The two systems will give KRA a view of goods as they leave the production line to the point of exchange between retailers and consumers collecting what is due at each point along the supply chain.

The taxman is sealing loopholes where traders and manufacturers under-declare the number of goods sold or produced to minimise taxes due.

‘’This year we, have come with a very aggressive way of ensuring all manufacturers of alcohol are fitted with three key gadgets including, a mass custody flow meter, a radar to monitor what is entering into their tanks, and CCTV cameras. All these gadgets will be integrated and ensure they can relay data remotely,’’ said Isaac Gachoka, a Kenya Revenue Authority domestic tax enforcement official.

Data shows that Kenya’s economy has been increasing at an average of 4.7 percent over the last five years yet taxes as a percentage of GDP have declined from 17.4 in 2018 to 16.6 percent in 2019 — an indication of mis-invoicing on taxation on goods and services.