A manual return maybe made but the same would be uploaded on itax . The Kenya Revenue Authority commits to process the applications within 30 days . However , it ’ s important to keep on following on the progress as they often are overloaded with many other requests .
Anyone undergoing a current audit on a tax obligation cannot qualify for this programme . However , through their relationship manager , they can explain their individual circumstances for their eligibility of the programme . At the end of the exercise , a certificate should be issued as evidence that the tax payer participated in the voluntary disclosure and that all taxes have been paid . This is to avoid future exposure to audits .
It is important to note that the tax payer is expected to disclosure all the material facts . Any discovery by the authority may result in the cancellation of the programme and the tax payer forced to pay all the taxes with penalties and interest .
The tax payer can enter into a formal written and acknowledged agreement with the Authority to stagger payments of taxes due . The Commissioner can allow up to a maximum of 12 months for the payment of the taxes .
Pay As You Earn ( PAYE )
In April 2020 , following the effects of Covid-19 , employees enjoyed a relief in the tax that they were paying to the government . Personal relief was increased while at the same time the 30 % tax band was done away with . This , coupled with the reduction of Value Added Tax ( VAT ) rate from 16 % to 14 %, meant that government would expect a dip in tax revenues .
In December 2020 , The Tax laws Amendment Act ( No 2 ) was assented by the president and thus came into force . In the Act , the 30 % tax bracket was reinstated . Further , the 15 % and 30 % tax brackets were abolished . This effectively increased the PAYE from employees , which is worse that the pre-covid bands . Employees whose income is below 24,000 in a month have benefited in that they will still pay no PAYE .
Other taxes affected were VAT which was increased from 14 % to 16 %, and corporation tax which was increased to 30 % from 25 %.
Conclusion
I would urge that we take advantage of the Voluntary Tax disclosure programme especially during this year to save up on the interest and penalty charge . The Kenya Revenue Authority is continually being innovative in tracking tax evaders such as using matching invoices of suppliers and customers through the VAT Auto Assessment ( VAA ). They have also adopted the use of Agency notice by requiring funds of tax defaulters to be directed to them . Taking advantage would save you the agony of audits and hefty assessments requiring payment of punitive taxes with penalties and interest .
In April 2021 , ensure that you have filed and paid PAYE and NHIF by the 9th , NSSF by the 15th , VAT by the 20th , Instalment / minimum tax by the 20th and Balance of Tax payment by the 30th of April .
I wish you a successful Second Quarter of the year 2021 .
CPA Nicholas Gachara is a Tax and Accounting Consultant . You can commune with him on this or related matters via email at : Nicholasgachara @ gmail . com .