he annual tax returns filing for the 2018 income year is already underway. Contrary to popular notion that the exercise takes place in the month of June alone, the system is open for filing from 1st January to 30th June every year. Despite the six-month filing window, however, some taxpayers still find themselves rushing at the eleventh hour to meet this civic duty.
Typical of any other last minute rush, filing tax return a day to the deadline or on the very last day comes with its fair share of unforeseen inconveniences. Such inconveniences can easily be avoided if taxpayers made use of the time allowed by law to submit their tax returns.
Early submission of a tax return is of great advantage to a taxpayer largely because it gives them ample time to complete the process. The taxpayers also find enough room to make any amendments in case they err in their original return. In addition, a taxpayer who works on their tax return early has ample time at their disposal to seek KRA’s assistance in case he or she is stuck at any given stage of the process.
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Issues that may arise during return filing such as forgetting the iTax portal password and email address, are solved on time when tax returns are filed earlier before the 30th June deadline. Taxpayers who file their returns earlier in the year, will attest to the fact that all KRA touch points are less busy and hence faster service delivery is guaranteed. This faster service may not be experienced during the last minute rush.
Through past experience, KRA has gathered that majority of taxpayers caught up in the last minute deadline are salaried ones; a shortcoming largely attributed to late issuance of P9 forms by employers. KRA is now reaching out to all employers and urge them to issue their employees with this crucial document early enough to enable them work on their tax returns in good time.
Apart from issuing P9 forms in good time, employers should also encourage their employees to file their tax returns immediately they receive the forms. This will further ensure that as many taxpayers as possible file their tax returns way before the June 30th deadline.
Why employees file tax returns
Why does an employee need to file their annual tax return yet their employer has been filing Pay as You Earn (PAYE) monthly on their behalf? Filing of individual tax returns is equally important to a salaried taxpayer and does not amount to a repetition of the exercise undertaken by the employer.
The exercise serves to balance the entries entered in the system monthly by the employer in addition to capturing any additional income that may have been earned in the period. This further puts checks on employers who deduct PAYE but fail to remit to KRA on behalf of their employees.
With this simplified version of a tax return, it takes a taxpayer an average of less than a minute to file their return.
KRA is continuously enhancing the iTax platform with a view to make it more efficient and easier for taxpayers to file their tax returns as well as seek other online services. For instance, the system was recently enhanced to make the filing exercise easier for taxpayers with employment income as the only source of income. This category of taxpayers no longer needs to download and fill out the ordinary excel return sheet.
Through the Income Tax Return (ITR) function, such taxpayers are required to fill out pension contribution and annual tax relief details only. With this simplified version of a tax return, it takes a taxpayer an average of less than a minute to file their return.
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Just like tax payment, filing of a tax return is a key compliance determinant that is put to account before KRA can issue a taxpayer with a tax compliance certificate (TCC). Conventionally, a TCC has become a requisite requirement in various disciplines such as in job recruitment and tender applications, among others.
Late submission or failure to submit a tax return altogether is an offence under the Tax Procedures Act, 2015 which attracts a penalty of Ksh2,000 for an individual taxpayer and Ksh10,000 or 5% of the tax due in the case of non-individual taxpayers. KRA has provided nationwide support at the Tax Service Offices to those who may need assistance in filing of their returns.
Taxpayers are encouraged to visit those offices for support and file their tax returns as early as today to avoid any last minute inconveniences that might come with the deadline rush on the 30th June, 2019.
The writer is the Commissioner for Domestic Taxes Department at the Kenya Revenue Authority (KRA).