All taxpayers whether individuals or non-individuals, are expected to comply with tax laws in the country. As evidence of tax compliance, they are expected to apply and get a tax compliance certificate. This is not a tax clearance certificate.
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What is a Tax Compliance Certificate?
In Kenya, a tax compliance certificate, shortened as TCC, is an official document issued by the Kenya Revenue Authority (KRA) as proof that an individual or business is meeting its tax obligations. It confirms that the taxpayer has filed all required tax returns and paid any outstanding taxes. The certificate is typically valid for 12 months from the date of issue.
Where is a Tax Compliance Certificate Used?
A Tax Compliance Certificate (TCC) is required in various situations. It is important to note that the list keeps on being expanded. Hence, it is important to continuously contact KRA. Some of those situations include:
- Government Tenders: Businesses bidding for government contracts must present a valid TCC.
- Job Applications: Some employers require job seekers, especially in government agencies, to have a TCC.
- Business Licensing: When applying for or renewing business permits, a TCC may be necessary.
- Loan Applications: Financial institutions may request a TCC when processing business or personal loans.
- Import and Export Transactions: Taxpayers involved in international trade may need a TCC for customs clearance.
- Visa Applications: Some foreign embassies require a TCC when processing visa applications for Kenyan residents.
Steps to Apply for a Tax Compliance Certificate
There are several steps you can take to apply for a tax compliance certificate. The following are some of those steps. It is important to remember that these steps may change. The tax industry in the country is dynamic.
Step 1: Log into the iTax Portal
To apply for a TCC, you need to access the KRA iTax portal. You can follow the following simple steps:
- Go to the KRA iTax website: itax.kra.go.ke Enter your correct Personal Identification Number (PIN) and then click on the button “Continue.”
- Input your password and answer the security question.
- Click “Login” to access your iTax account.
Step 2: Navigate to the TCC Application Page
Once logged in navigate and:
- Click on the “Certificates” tab at the top menu.
- Select “Apply for Tax Compliance Certificate” from the dropdown menu.
- A new page will open with the TCC application form.
Step 3: Fill in the Application Form
You will need to provide the following details:
- Taxpayer PIN: Your KRA PIN number.
- Tax Obligation Details: Indicate the type of taxes you are registered for (e.g., Income Tax, VAT, PAYE).
- Reason for Application: Select from options such as employment, business, or tendering.
- Declaration: Confirm that all tax returns have been filed and payments made.
Step 4: Submit the Application
- Click “Submit” after filling in the required details.
- A system-generated acknowledgement receipt will be provided.
- You can track the status of your tax compliance application in your iTax account.
Step 5: KRA Review and Approval
KRA will review your application to verify that you have met all your tax obligations. If everything is in order:
- The certificate will be issued immediately
- If not, you will be told any outstanding tax issues, and once the issues are sorted, expect the certificate within 5–10 working days.
- You will receive a notification via email.
- You can download the certificate from your iTax portal.
Step 6: Download the Tax Compliance Certificate
You will get the certificate in your email. However, in case you will need a copy, you need to download your TCC:
- Log back into the iTax portal.
- Click on the “Certificates” tab.
- Select “Consult and Reprint Tax Compliance Certificate.”
- Enter your application reference number.
- Download and print your certificate.
Common Reasons for Rejection of a Tax Compliance Certificate Application
Sometimes, an application may be rejected due to:
- Unfiled Tax Returns: Ensure all tax returns, including PAYE and VAT, are up to date.
- Outstanding Tax Liabilities: Settle any pending tax dues before applying.
- Mismatch in Taxpayer Details: Verify that your PIN and other details are correct.
- Previous Non-Compliance Issues: If you have been penalized before, ensure you clear all issues with KRA.
If your application is rejected, KRA will provide reasons. You can rectify the issues and reapply.
Benefits of Having a Tax Compliance Certificate
- Legal Compliance: Ensures you meet legal tax obligations.
- Business Opportunities: Opens doors for government tenders and contracts.
- Financial Transactions: Required for loan applications and other financial dealings.
- Job Market Competitiveness: Increases credibility when applying for jobs.
- Smooth Business Operations: Avoid disruptions due to tax non-compliance.
Related Articles
- How to File PAYE Returns in Kenya
- Understanding VAT Compliance in Kenya
- How to eFile Income Tax Filing: step-by-step
- Penalties for Late Tax Filing and How to Avoid Them
- How to Register for a KRA PIN
- Income Tax Deductions and Benefits in Kenya
- How to Handle Tax Disputes with KRA
- KRA Obligations and Where to Complain If Aggrieved
Conclusion
A tax compliance certificate or TCC is an essential document for individuals and non-individual taxpayers in Kenya. By following the outlined steps above, you will enjoy a smooth application process. To maintain tax compliance status, it is important to always file your tax returns and settle any outstanding taxes on time. If you encounter any issues with your tax compliance application, you can seek assistance from the KRA offices, Customer Care Services or their online support channels.
