For the benefit of the Kenyan government, taxes are collected by the Kenya Revenue Authority (KRA), a government body in Kenya. The KRA Act, which formed the agency in 1995, gives the Ministry of Finance control over how it is run. KRA’s primary duty is to raise money for the government. It also has a vital role in promoting compliance, facilitating trade, and combating economic crimes including tax evasion and money laundering.

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Functions 

Although the agency has many duties, its primary duty is to collect money for the government. The money raised is used to pay for public expenses, such as the delivery of security, health, and education services. They are responsible for collecting any taxes, including property tax, excise duty, value-added tax (VAT), and customs and excise taxes.

Income tax 

Income tax is a tax on both personal and business income. KRA collects income tax from employees through Pay As You Earn (PAYE) and from businesses through Corporate Income Tax (CIT). Employee income is subject to PAYE tax, which the employer withholds at the source and then sends to KRA. Business profits are subject to the CIT, which is paid annually based on the profits made the year prior.

VAT

The value-added tax, or VAT, is levied on products and services at each stage of production and delivery. Businesses that have registered for the tax pay VAT to KRA, which then sends the money to the government. Excise duty is a charge on particular products that are seen to be bad for your health or the environment, such as alcohol and tobacco. The government’s excise tax is collected by the agency.

Customs and excise taxes

Imported goods and services are subject to excise and customs charges. At the point of entry into the nation, KRA is in charge of collecting these taxes, and it collaborates closely with other governmental organizations to guarantee compliance with customs laws. Property owners pay a yearly fee to the county government known as property tax, which is based on the value of their properties.

Facilitating trade

KRA is essential in facilitating trade in addition to bringing in revenue. The organization is in charge of carrying out trade policies, which include managing trade agreements, managing customs clearance processes, and inspecting goods at ports of entry. The agency collaborates with other governmental organizations, such as the Kenya Bureau of Standards, to guarantee that imported goods meet quality and safety standards.

Promoting tax compliance 

Moreover, this agency is responsible for encouraging adherence to tariff laws and rules. To help taxpayers understand their responsibilities and the advantages of paying taxes, the agency offers education and awareness programs. KRA also offers voluntary compliance programs, such as tariff amnesty programs, to encourage taxpayers to come forward and declare any past tariff liabilities.

Fighting economic crimes 

In addition, KRA is responsible for fighting economic crimes such as tax evasion, money laundering, and corruption. The agency has a dedicated department, the Directorate of Criminal Investigations, which is responsible for investigating economic crimes. KRA also collaborates with other government agencies, such as the Ethics and Anti-Corruption Commission, to combat corruption and other economic crimes.

To fulfill its mandate, KRA operates through various departments and units. These include the Domestic Taxes Department, which is responsible for collecting income tax, VAT, and excise duty. The Customs and Border Control Department is responsible for collecting customs and excise taxes and facilitating trade. Then, the Intelligence and Strategic Operations Department is responsible for fighting economic crimes.

Conclusion 

To sum up, the Kenya Revenue Authority is an important government body in charge of bringing in money on behalf of the Kenyan government. The organization is essential in encouraging adherence to tariff regulations, fostering trade, and combating economic crimes including tax evasion and money laundering. The growth of Kenya’s economy depends on KRA’s success.