File your KRA returns early, avoid sh. 20,000 penalty only 2 days left

File your KRA returns early, avoid sh. 20,000 penalty only 2 days left

Nearly a third of Kenyans have not filed their tax returns seven days to Sunday’s June 30 deadline, exposing the 1.3 million non-compliant individuals and companies to fines.

Kenya Revenue Authority (KRA) said Wednesday 2.7 million Kenyans had filed their tax returns by June 23 against a target of four million taxpayers.

Individuals who fail to meet the Sunday deadline face a fine of Sh20,000 or five per cent of the tax payable in the year under review or whichever is higher.

But those filing for employment income only face a fine of Sh10,000 or 25 per cent of income tax payable in the year the return is meant to capture or whichever is higher.

The KRA in March said it was targeting four million returns at the end of June.

The Treasury said the taxman would pursue workers and business people who failed to declare their income to the State in a drive aimed at plugging the revenue shortfalls.

Tax collection for the first nine months to March was short of the target by Sh95 billion, mainly due to reduced economic activity and drought that hit agriculture.

Kenya has been blamed for a small tax bracket that fails to capture the self-employed and those working in the informal sector.

Official data show that 2.9 million Kenyans worked in the formal sector last year compared to 14.8 million in the informal sector.

To nab the tax cheats, the KRA will review data from the platform that links the government payment system to the online tax register, dubbed the iTax, targeting those who make millions of shillings from trading with the State.

PIN DEACTIVATION

The taxman is also relying on the filings by companies revealing their suppliers and the amount paid for their goods or services in what earlier led to the deactivation of PIN accounts in a crackdown on tax cheats.

The Treasury is also betting on the presumptive tax charged at the rate of 15 percent of the annual business permit fee paid to the counties to arrest tax cheats.

The KRA forecasts to net one million small traders who have limited contact with the revenue system, save for indirect consumption levies via the business permit tax.

Kenya projects to collect Sh1.87 trillion in taxes in the year starting July, from the Sh1.65 trillion it expects to raise in the year ending Sunday.

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