Some Sh1 billion paid to Kenya Income Authority (KRA) within the 2017/18 monetary yr was lacking from its financial institution accounts, an Auditor Normal report reveals.
In his audit report on the taxman’s income statements, outgoing Auditor Normal Edward Ouko famous that the money and money equivalents captured within the taxman’s accountability assertion didn’t mirror in its financial institution accounts.
The checking account with the biggest discrepancy was the one on the Nationwide Financial institution of Kenya (NBK) the place Sh348 million was lacking.
The discrepancy is replicated in all KRA’s 51 financial institution accounts.
“Money and money equal within the income accountability assertion mirrored a stability of Sh22,734,898,175.
Nevertheless, a comparability of the closing balances/banks assertion as of 30 June 2018 amounting to Sh21,830,770,108 revealed variance of Sh904,128,067 whose reconciliations couldn’t be adequately defined as on the shut of the audit,” mentioned Ouko within the report.
In response, KRA famous that the variance of Sh904,128,067 arose because of the cut-off procedures on the yr finish, with changes integrated to the certificates of stability figures to maintain the timing variations.
“There may be at all times timing distinction as of June 30 of every yr between receipt of income for the yr (similar to 2017/18) at agent business banks and their switch and receipt on the Central Financial institution,” mentioned KRA Commissioner for Home Taxes Elizabeth Meyo.
On the identical time, Ms Meyo defended KRA in opposition to experiences by the Auditor Normal’s workplace that some county governments had been deducting taxes from salaries of their staff and members of the county assemblies (MCAs) however not remitting the cash to the taxman.
Based on an audit report, some county governments have been holding onto almost Sh13 billion that their staff contributed in the course of the 2017/18 monetary yr in Pay As You Earn (PAYE) tax.
Meyo famous that counties paid on to the Central Financial institution of Kenya (CBK) and the quantity appeared as a sophisticated tax within the taxpayers’ ledger balances.
Meyo defined that each one the 12.9 billion was fee remitted on to Central Financial institution by means of the Built-in Monetary Administration Info System (Ifmis) – the State’s public digital procurement system.“
Since counties, county assemblies, ministries, and state departments make all funds by means of Ifmis, which isn’t absolutely built-in with iTax, their ledgers are up to date by means of a steady guide reconciliation course of to mirror the credit when the funds are sighted within the CBK statements,” she mentioned.
Within the report on KRA’s funds, Mr Ouko mentioned that of the Sh364 billion the taxman collected as revenue taxes in 12 months to June 2018, PAYE totaling Sh12.9 billion was not paid.
With out data to show fee of the taxes, the highest auditor didn’t give KRA’s monetary assertion a clear invoice of well being and as a substitute slapped it with a certified opinion.
A professional opinion is given by an auditor within the absence of monetary data or the place there’s inadequate cooperation from an establishment’s administration.
Ouko mentioned there’s a reflection of revenue tax PAYE collected amounting to Sh364,103,621,093 within the income accountability statements.
As a consequence of lack of income receipts to help the reconciliation with the taxpayers’ ledger mentioned Ouko, the completeness and accuracy of the PAYE income assortment for the yr ended June 30, 2018, couldn’t be ascertained.