92 percent of Firms ‘Fail to Pay Corporate Taxes’

Kenya Revenue Authority headquarters in Kenya’s capital Nairobi. Wealthy Kenyans filed to return $1.18 million assets from foreign countries in the final year of a tax pardon, official data shows. PHOTO | FILE | NATION MEDIA GROUP

September 13, 2019//-More than 90 percent of companies failed to pay corporation tax in the year to June in what has puzzled the Kenya Revenue Authority (KRA) and pointed to evasion of paying duty.

Data from the Kenya Revenue Authority shows that out of 401,306 companies registered for corporation tax in Kenya in the period to June, only 33,426 paid taxes on their net income.

That translates to a compliance rate of 8.3 percent of the firms eligible to pay taxes from business profits, and worst performing category when compared to segments like personal income duty.

About 168,428 of the firms or 42 percent of them filed their tax returns, signalling they were active, but 80 percent of them did not pay the taxman a shilling, underlining the pressing problem of few Kenyans and companies shouldering the tax burden.

KRA told Parliament it was puzzled by the variance between the firms filling for return and taxpayers — pointing to a tax evasion trend among corporate citizens.


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