Kenyan traders moot holding street protest demos

The announcement came as the Kenya Revenue Authority and traders hardened their positions over the controversial machines. While the traders vowed to close their businesses today in protest over KRA’s crackdown against those who have not installed the gadgets, the tax collector insisted there was no going back on plans to streamline revenue collection. The authority said traders had been given adequate time to install the machines which the authority says will improve tax compliance. But the traders’ lobby, the United Business Association (UBA), called on Finance minister Amos Kimunya to shelve the plans, terming the introduction another “Goldenberg or Anglo Leasing” scandal. In the new directive, all traders are required to instal tax registers which will be programmed to enable KRA inspectors to monitor purchases and ensure the correct taxes are paid. Traders can then claim refunds for expenses incurred in installing the machines from KRA. The traders argue that the machines are overpriced and question why only certain dealers have been licensed to sell them. The machines were being sold at between Sh50,000 and Sh150,000 locally while international suppliers were quoting the price at $250 (about Sh18,000) without tax. The traders say that the way the machines have been programmed would make it impossible for corrections to be made if wrong entries are made. KRA acceded to some of the demands by allowing traders to import the machines directly if they so wished, as long as they took them to the tax authority for programming. Shops on some city streets remained closed for the third day yesterday as traders protested against a KRA crackdown on those that have not complied. The traders’ lobby said business people will march to KRA offices today to protest against alleged harassment by its agents. The protest will take place in Nairobi, Mombasa, Nakuru, Kisumu, Eldoret and other big towns. However, KRA dismissed arguments by traders that it was costly to purchase the equipment, saying it will reimburse all the funds. “It is not a secret that the Government will incur the cost of installing the ETRs.” The authority said it had given the traders between June 1 last year and January this year to meet the requirements. It gave an additional two months grace period. The tax collector blamed the UBA for misleading traders not to comply with the requirements. “This period was adequate enough to allow them to install the same… We also gave the traders administratively a further two months as we educated them and implemented a wide publicity campaign,” the KRA said. “This has been adequate and no further extension is recommended.” The tax collector dismissed claims that it had picked a group of individuals to sell the machines. KRA said it had reimbursed traders Sh47 million for machines bought last month. “KRA does not license suppliers of ETR, rather it only approves the gadgets after testing and ascertaining that they comply with the laid down specifications,” the statement said. The authority explained that the commissioner was empowered by the law to take action against those who did not comply. Traders who defy the law are handed administrative penalties or charged in court. Although administrative penalties can go up to Sh500,000, the highest penalty so far imposed was Sh20,000. The tax registers assist traders to keep records and gives them the correct amount of VAT they are required to pay. This is because the tax collector programmes the machines, giving the amount to be paid in tax whenever an item is sold. It also has a memory that cannot be erased thereby assuring accurate records, reducing tax audit periods and paper work on tax payers and the auditors. The registers were approved by Parliament in 2004 but enforcement was gazetted in January last year. ‘

April 2006
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