In a bid to deter corruption through tax evasion, KRA plans to install flow meters and CCTV cameras in alcoholic factories.
The strategic move is will curb tax evasion and increase revenue collection, ensuring accurate collection of the due taxes pegged on products manufactured.
The taxman explained that the flow meter will track high volumes of alcoholic beverages produced to maximise the excise tax collected. On the other hand, CCTV cameras will track production volumes by relaying data in real-time.
The metering device will be introduced to all alcoholic beverages including beer and gradually to other excisable products like water. KRA’s chief manager tax enforcement Isaac Gachoka said that KRA is using aggressive ways of fitting the three gadgets (mass custody flow meter, radar and the CCTV cameras) integrated to ensure that the data relayed is seamless and makes sense.
The installation of meters was expected to start in October 2011 but had to be streamlined to ensure efficiency and perfection for better tax collection.
KRA loses billions in tax evasion annually, for instance, in the year 2019, the estimated tax loss was KShs. 259 billion. Companies evade tax by under declaring sales, inflating allowances for a profit cut, overstating purchases to claim more VAT, among other ways.
President Uhuru Kenyatta is keen on curbing tax evasion as a vice considered to be corruption, costing Kenya billions in tax money. The billions could be channelled into development projects such as infrastructure, healthcare, education, among others.
The move by KRA, will seal revenue loopholes in the manufacturing sector and help harness the much-needed money to support the Big Four Agenda for a better and sustainable economy.