KRA must walk the talk on tax refunds

Times Tower in Nairobi, the Kenya Revenue Authority headquarters. FILE PHOTO | DENNIS ONSONGO | NMG

The Kenya Revenue Authority (KRA) has for decades hurt the cash flows of businesses from delays in making tax refunds.

The delays have denied firms the funds to reinvest in their operations and make profits, which impacts future taxes, in a classic case of shooting yourself in the foot.

As the taxman demands taxes to be paid in 24 hours, it is a legitimate expectation from firms to expect the same speed when it comes to refunds.

Despite various reforms to cure the refunds headache, the KRA still owes businesses Sh12 billion as of the end of April, denying local enterprises the much-needed liquidity.

Proposals to the 2023 Finance Bill should serve as a wake-up call to the taxman to meet its end of the bargain, matching the turnaround in tax refunds to its demand on taxpayers.

MPs who play the oversight role in the passage of the Finance Bill should ensure the adoption of twin proposals to hasten the payments on refunds.

This will allow taxpayers to offset current and future tax liabilities with outstanding tax refunds and ease cash flow challenges.

The reduced timeline of processing refunds from two years to six months is also a welcome relief.