The Kenya Revenue Authority (KRA) is now planning to start blocking the bank accounts and pin numbers of workers in the informal jua kali sector over the government’s controversial housing tax.
The KRA claims that jua kali workers have not been paying the tax. The taxman further claims that businesses in the sector such as bars, salons, and corner shops have not been remitting deductions from their workers.
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Apparently, the KRA will use spies to carry out background checks on businesses in the informal sector and on jua kali workers. The taxman expects that these workers should pay 1.5 per cent of their gross income which is revenues minus the cost of goods sold.
“If you are not truthful about your business, your income and the people you have employed, then it also becomes difficult on our end and that is when enforcement comes in,” Affordable Housing Board acting chief executive officer Sheila Waweru told a local media house.
“Whatever mechanism [KRA] are using to collect the taxes is the same mechanism for the housing levy because that is the same income from which you are required to pay the tax. KRA has foot soldiers who walk around even in the estates where businesses are and they will come to your premises to see if you are making money, if you are registered under KRA and if you’re paying taxes and the levy.”
Although taxes amounting to billions of money have been collected under this fund, construction works on the ground have not kept up. The government under President William Ruto had claimed that it was targeting to build about 250,000 houses per year. However, currently, only about 0.4 per cent of these houses are being built per year.
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