If you have been running away from taxes, you might have been jumping out of the frying pan and will soon be landing in the fire. Filling tax returns has been one of the revenue collector’s way to deal with tax evasion and grow its tax collection basket as the law requires anyone with a PIN to file their annual returns irrespective of their employment status.
Defaulting to pay Kenya Revenue Authority (KRA) penalties in the next 15 days will see you land in trouble. The stubborn souls that have refused to comply are risking their Personal Identification Numbers (PIN) being deactivated and a cut from their pay.
“Please make payment of Sh2,000 within 15 days ending 30 July failure to which attracts collection enforcement measures,” read the KRA notice to some of them.
The laws on taxes are binding. As per the Tax Procedures, Act of 2015 KRA has the authority to order employers to deduct the penalties and tax dues from worker’s salary. The taxman said 3.6 million Kenyans filed their tax returns against a target of four million, and the authority is looking to bring the few up to speed.
“Under subsection (2) requires an agent to deduct a specified amount from a payment of a salary, wages or other similar remuneration payable at fixed intervals to the taxpayer. The amount required to be deducted by an agent from each payment shall not exceed twenty per cent of the amount of each payment of salary, wages or other remuneration (after the payment of income tax),” reads the Act.
Individuals who failed to meet the deadline face Ksh 2,000 fine or five per cent of the tax payable in the year under review while companies face a penalty of Ksh 20,000 or five per cent of the tax payable in the year the return is meant to capture or whichever is higher.