In 2009/2010, Safaricom paid the Kenyan taxman a total of Sh25 billion in various forms of taxes.
The award was presented to Safaricom’s incoming CEO Bob Collymore by Kenyan President Mwai Kibaki at a colorful ceremony attended by top companies from the private and public sector. Several other companies and institutions also received awards in various categories.
Speaking at the function, Kibaki said reform of tax laws and rules are on the way to create a simpler tax regime, increase the revenues and cut the current high cost of compliance.
Kibaki said despite the achievements of the Kenya Revenue Authority (KRA) in the recent past, more legislative reviews and reforms are necessary.
“It is only through improved tax compliance that we can raise adequate resources and attain self reliance as a country,” said Kibaki.
“The work towards a simplified VAT (Value Added Tax) legislation has begun, and the draft will be ready for discussion before the fourth quarter of the year.”
The planned tax reforms are part of the administration reforms and modernisation programme, which seeks to close the tax gap and broaden the tax base.
Currently, KRA pays out VAT tax refunds in order of priority, with companies classified as high, medium and low risk. Low risk firms receive their VAT refunds even before their returns are audited.
While applauding the latest move as a step in the right direction, coupled with the recent decision by Treasury to beef up the monthly VAT refunds kitty to Sh1.18 billion from Sh1 billion, businessmen still say the delays are forcing them to seek funding from commercial banks to shore up their liquidity and make upfront tax payments.
BRIAN ADERO in Nairobi, Kenya
