E-Tax- Solution for Revenue Collection in Africa

A phenomenon which is common in the developing countries, e-tax payment has not been well embraced in the African continent. Tax payments still use the manual system which takes a long while. Goods, services and other entities that are entitled to pay tax have found it an uphill task.

“It (e-Tax) has ultimately contributed positively to the overall tax base as it has improved efficiency and reduced the amount of time would spend on clearing their dues”, said Mr. Protasio Begumisa, Acting Commissioner Domestic Taxes during a media briefing in Kampala last week.

Their Kenyan counterparts, Kenya Revenue Authority (KRA) introduced e-tax systems such as obtaining tax forms online, applying for Personal Identification Number (PIN). E-payment has not been implemented, but KRA has since been embarking on automating all their systems.

The URA is also contemplating on introducing other services such as the use of Short Messaging Service to alert individuals when their taxes are paid. The milestones for the use of IT in government is yet to be realize but its positive all the way. “As we consolidate gains of e-Tax, more tax payers are finding it easier to utilize the online services to transact with us. For example, new registrations made through the web portal increased from 2,440 in January 2011 to 5,125 in January 2012, which was a 110%”, Begumisa said.

Louis Bisuche, an accountant at Komsol, Limited, in Kenya, told HumanIPO the benefits of having an e-tax platform. “Employers and financial institutions would file withholding and information returns electronically, providing electronic copies to taxpayers and their designated representatives. Financial institutions may integrate tax account information with other customer financial information into an electronic financial portfolio, allowing online account inquiry, customized financial advice, tax filing and payment reminders and electronic tax payments.”

And for governments, Louis pointed out that sharing of information on tax compliancy by companies and individuals would be easy, seeing that the information management would have been eased. But are we there yet?

“There are still challenges towards achieving a good e-tax system in our country. The KRA Should act as an integrator of this network of tax administration service providers. Its own electronic tax administration processes and systems should be designed to facilitate the smooth interaction of its internal functions with the specialized functions of its third party partners and taxpayers.” Louis said to HumanIPO.