Kenya Revenue Authority Tightens Grip on Farmers: Sugarcane Growers Under Pressure to Comply with e-Tims
Highlights
- The Kenya Revenue Authority (KRA) intensifies efforts to enforce tax compliance among sugarcane farmers, demanding registration on the e-Tims system for selling produce.
- Butali Sugar, among other millers, issued an ultimatum for farmers to provide electronic tax invoices, signalling a shift towards digitised tax management in the agricultural sector.
- Farmers, particularly avocado growers, express frustration over burdensome tax requirements, citing challenges with electronic invoicing systems and the need for smartphones and KRA pins.
- Despite government efforts to increase revenue through new tax measures, KRA faces hurdles in expanding the tax net to the informal sector, highlighting the complexities of tax enforcement in Kenya.
In the ongoing saga of taxation woes, the Kenya Revenue Authority (KRA) has now turned its attention to sugarcane farmers, issuing a stark ultimatum: comply with the controversial tax information management system, e-Tims, or face repercussions in selling their produce.
Sugar millers, such as Butali Sugar, have begun enforcing this directive, demanding electronic tax invoices from farmers for cane deliveries.
The move echoes KRA’s recent efforts to rope in various informal sectors into its tax net, following its crackdown on avocado, milk, and tea farmers.
Avocado farmers, especially in Central Kenya, have decried the burdensome taxes imposed on their produce, leading to exporters relocating operations to neighbouring countries like Tanzania.
The predicament faced by farmers was highlighted in a recent meeting convened by Deputy President Rigathi Gachagua, where stakeholders aired grievances over the complexities of registering on e-Tims.
Farmers cited unfamiliarity with electronic invoicing systems and the requirement for smartphones and KRA pins as major hurdles.
Amidst these challenges, the Kenyan government, led by the Kenya Kwanza administration, has been steadfast in implementing new tax measures to bolster revenue streams and reduce reliance on public debt.
These include a hike in fuel VAT and a surcharge to fund affordable housing, aiming to generate an additional Sh200 billion annually.
However, KRA’s ambitious plans to expand the tax bracket to the informal sector have encountered obstacles, as acknowledged by KRA Commissioner General Humphrey Wattanga.
The informal sector’s elusive nature and lack of transparency pose significant hurdles to effective tax enforcement, prompting the need for innovative strategies to combat tax evasion.
Despite these setbacks, KRA remains resolute in its pursuit of revenue augmentation. Plans to integrate systems with telecommunications companies, banks, and the Central Bank of Kenya are underway, with the aim of bolstering tax compliance through comprehensive data analysis and field operations.
President William Ruto’s ambitious revenue plan, aimed at uplifting low-income earners, is yet to gain traction amidst persisting challenges in meeting tax collection targets.
As the government grapples with balancing fiscal needs and addressing public debt, the plight of farmers and informal sector workers underscores the complexities of navigating Kenya’s evolving tax landscape.
