By Rispah Simiyu – Commissioner for Domestic Taxes Department at the Kenya Revenue Authority (KRA)
The year 2020 will go down in history as one of the most difficult years that stretched our resilience, following the outbreak of the Covid-19 pandemic.
Despite the adverse effects of the pandemic, we remained strong and never bowed to the pressure. Revenue collection in the country for instance has been on course thanks to patriotic citizens who believe in Kenya’s potential for domestic resource mobilization for self-sustenance. The same resilience was demonstrated by the many taxpayers who filed their 2019 returns within the stipulated deadline last year. More than 4.6 million taxpayers had field their tax returns by 30th June 2020, which was a substantial improvement compared to prior years.
As we reflect on 2020, the Kenya Revenue Authority (KRA) reminds all taxpayers that the filing of annual tax returns for the year 2020 is on course. The exercise is meant for individual taxpayers and business entities whose accounting period runs from January to December.
Individuals with employment income require P9 forms issued by their employers, to file their tax returns; it is therefore paramount that employers issue their employees with P9 forms in good time for timely filing of their tax returns. Those with business income should have their books of accounts and financial statements for reference when filing their returns.
Business entities whose accounting period corresponds to the calendar year are further required to pay their balance of tax for the year of income 2020, by 30th April 2021. For entities running a different accounting period, the balance of tax should be paid on or before the last day of the fourth month after the close of the accounting period. The filing deadline for such entities is the last day of the sixth month after the accounting period.
Submission of all tax returns is done online on KRA’s iTax platform. In addition to filing of tax returns, iTax is the gateway to conducting other tax business such as PIN application, tax payment, taxpayer ledger maintenance, application for tax compliance certificates, application for waivers and payment plans, among others. iTax is among various technological advancements that KRA has put in place to enhance efficiency and simplify the tax administration process.
KRA has continuously made deliberate efforts to simplify the process of filing tax returns for enhanced user experience. For instance, taxpayers with employment income only can now use the simplified web based pre-populated income tax return, labelled ‘ITR for employment income only’ on iTax to file their returns. To further simplify tax processes, KRA has also introduced a mobile phone application known as M-service which enables taxpayers access various services offered by the Authority such as taxpayer registration, filing of returns and payment of taxes. Taxpayers who did not have any income last year can use the M-service application to submit a Nil return. Simplification of tax processes translates to higher compliance among taxpayers, hence KRA’s continued commitment to simplification of its processes.
Filing of one’s tax return is important since it is a declaration made to the Commissioner of the income earned or generated over a given period. Contrary to popular belief, a Nil return constitutes such a declaration as well, hence the requirement to file one where appropriate. In addition to tax payment, filing of tax returns is a key tenet of tax compliance which KRA considers in the issuance of a tax compliance certificate and is often a requirement when seeking employment or business opportunities especially in public institutions.
Individual taxpayers who fail to file annual tax returns within the stipulated time frame will be liable to a penalty of Ksh. 2,000 or five per cent of the tax due, whichever is higher. Non individual entities on the other hand are liable to a penalty of Kshs. 10,000 or five per cent of the tax due, whichever is higher, for late filing of returns. It is therefore important for taxpayers to ensure that they are compliant at all times.
In light of the prevailing pandemic which has called for restricted physical engagements, KRA has enhanced virtual customer support to cater for taxpayers who might experience challenges in the course of submitting their tax returns. Taxpayers can seek support through the KRA contact centre on 0711 099 999 or by sending an email to [email protected] Our social media pages are also open for taxpayers who wish to seek assistance via social media. Do not wait till the end of June to file your tax return. Submit your annual tax return as early as now.
Mrs Simiyu is the Commissioner for Domestic Taxes Department at the Kenya Revenue Authority (KRA).