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After learning that the agency provided incentives of Sh610 billion over the previous five years, KRA declares it will audit tax relief regulations.The action is being taken despite growing concerns from Ruto's administration over the rising cost of taxes.
The KRA's decision is in line with Treasury's recent statement that the government must make sure it is getting value for its money when giving tax breaks to companies.
All tax relief programs have been terminated by the Kenya Revenue Authority (KRA) with immediate effect.
Board chairman Anthony Mwaura, who also served as the chairman of UDA's National Elections Board, said the action was motivated by growing concerns from Kenyans about how tax reliefs and exemptions were administered in a statement issued just days after a management purge forced out Commissioner-General Githii Mburu and other top executives.
"In the past five years, KRA has granted tax reliefs and incentives totaling Sh610 billion, with an average of Sh122 billion per annum. The decision to suspend tax relief payments allows KRA to audit and improve tax relief processes and procedures," KRA said on Tuesday.
The action is one of several steps being taken to minimize tax expenditure, or the income the government forgoes in order to accomplish particular goals, and to stop revenue leakage.
For instance, to protect consumers from high costs or to encourage investment in a sector, the government may zero-rate or exclude some products from paying certain taxes.
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