The Kenya Revenue Authority (KRA) has begun migrating all historical tax balances to the iTax system as the agency rounds off the centralization of taxpayers’ data.
Subsequently, KRA is set to first reconcile taxpayers’ accounts in the old system in a bid to authenticate correct balances.
“During the exercise, tax payers will be contacted by heads of their respective tax stations through letters to confirm their ledger balances before the migration,” noted KRA in a statement issued Friday.
The exercise which has already kicked off with large and medium taxpayers will in due course be rolled out to other taxpayers’ countrywide.
Taxpayers will be allowed to dispute the correctness of outstanding balances by presenting evidence supporting a different ledger position during the review exercise.
KRA’s migration of the legacy ledger balances represents the tax man’s push for efficiency in both compliance and revenue administration through the leveraging on modern tools.
The iTax system allows taxpayers to update their tax registration details, file tax returns, register all tax payments and make status enquiries with real-time monitoring of accounts.
The adaptation of the system has seen a steady increase in compliance level by widening the taxpayers’ base and improving the detection capacity through data analytics.
The adjustment has been previously tipped to double both revenue collections and registered users as KRA seeks to meet its threshold of collections to support government expenditure.
During its first full year of implementation in the 2016/17 fiscal year, the system guided the improvement of collections by Ksh.115 billion to Ksh.1.37 trillion.
While the tax man is yet to hit its required collection ceiling, collections have been on the rise with the latest six months mobilization efforts to December 31 2019 yielding an 18.8 percent improvement in raised revenues to Ksh.857.9 billion or an equivalent 8.3 percent of GDP.
The iTax system has been flanked by further investments in new technologies including the Integrated Customs Management System (ICMS), the Customer Relationship Management System, the Cargo Scanner Management Solution and the Excisable Goods Management System (EGMS).