When taxpayers do not receive a response from the KRA for any tax questions, they panic. This is largely because of the resultant penalties and interests that may be levied. I have often received emails from taxpayers on edge – the reason the KRA is not responding to their queries. My response is always–to relax and do what you are expected to do. And what is that?
Understand the following:
KRA’s limited capacity
As a corporate body, the KRA does not have enough employees to sort out every problem all taxpayers may be experiencing. KRA has less than 10,000 workers against a taxpayer population of approximately 8,000,000.
The Kenyan media have, on various occasions, told us this is the figure of persons with personal identification numbers (PINs).
For illustration purposes to demonstrate how sometimes KRA officers can’t respond to taxpayers’ queries, let us assume that all the 8,000,000 taxpayers have each one question and all KRA employees can answer the questions.
Each KRA employee would have to handle 8,000,000/10,000 taxpayers, who are 800 questions annually. There are approximately 261 working days (365-104 weekend days). Each employee would then have to answer (800/261 ) = 3.07 questions per day.
Only 3.07 questions? That is manageable.
However, not all KRA employees deal with taxpayers’ questions. Also, rarely do taxpayers have one question. A taxpayer can have as many as ten questions or more. Some questions can be very complex, and they can take years before they are sorted out.
i-Tax Platform
Many people expected the i-Tax platform to be a panacea for all taxpayer’s problems in Kenya. However, there are currently many problems that taxpayers are grappling with that have resulted from the use of or failure to use the i-Tax platform. There are many good things about the i-Tax platform. But just like any system, many problems are likely to be experienced.
No system is one hundred per cent fault-proof.
That is why systems are updated regularly. Many tax problems that had not been foreseen when i-Tax was being developed and configured are emerging as the system is being used. For example, correcting a mistake in a tax return in i-Tax can be equated to carrying an elephant.
The frequent downturns in the system is another factor. This has been attributed to Kenyan’s unique nature of being last-minute people. Though not a bad system, i-Tax may have increased tax-related stress to KRA officers and taxpayers.
It is probably time to audit the i-Tax system by asking the users (tax officers and taxpayers) about it.
Protection in Tax Procedures Act (2015)
The Tax Procedures Act (2015) (TPA) has provided solutions to protect taxpayers from unnecessary penalties and interest. The following are some of the sections that a taxpayer can use:
- Section 33 is on the extension of time to pay tax.
- Section 36 is on security for payment of tax.
- Section 40 on security on the property for unpaid tax.
- Section 42 on power to collect tax from a person owing money to a taxpayer.
- Section 51 on objection to tax decisions.
There are very many other sections under TPA and other taxes that afford taxpayers’ protection.
Prompt Response to KRA Tax Questions
Taxpayers must recognise that answers to queries are expected to be provided within certain timeframes. Hence, taxpayers need to respond promptly to any query by the KRA. If the taxpayer has questions, they should contact the KRA; the contact person is always indicated in the communication.
It is also important to respond to the KRA queries in writing. Even in situations where the communication is through i-Tax, such as tax assessments, the taxpayers should respond through a letter on the company’s letterhead. The taxpayer can drop the letter to the respective KRA office or email the letter. A hard copy should be maintained in the company’s tax file.
Follow instructions from KRA
Taxpayers need to follow instructions from KRA. For example, all tax assessments have a clause that the taxpayer has thirty (30) days to object to the assessment.
That has to be followed.
The taxpayer should always follow Section 51 of the Tax Procedures Act (2015) when dealing with any tax objection.
Seek information about Tax Questions
The saying “information is power” is very relevant to taxpayers. Every taxpayer should take as their responsibility for learning about taxes. It is not KRA’s responsibility to teach taxpayers about taxes. But if taxpayers walk into the KRA offices, they will be taught tax.
KRA’s core business is to collect tax on behalf of the government. A taxpayer’s responsibility is to pay the correct amount of tax and remit it promptly. The government’s responsibility is to receive tax. (forget about the use for the time being).
Therefore, it is important for taxpayers to continuously be abreast of what is happening in the tax environment. Taxpayers should occasionally read the various tax Acts in the country. In cases where they cannot, the taxpayers should ensure that those persons entrusted with handling their tax matters are up-to-date with tax information.
The taxpayers can also attend tax seminars and tax conferences. Further, the taxpayers can read blogs and newspapers, etc. There are many sources of tax information.
Tax is core to any business
Many taxpayers get into problems because they do not think tax matters are important. The tax takes thirty per cent (30%) of the taxable profits. Therefore, this makes it very important to treat taxes as very important. Disregarding tax has resulted in business trouble that may lead to the closure of the same business.
For everything that taxpayers do, they must always remember the tax implications. This will shield the taxpayer from a lot of headaches.
Conclusion
Tax problems are taxpayers’ problems, not KRA’s. Therefore, taxpayers should take incentives and be innovative to sort out tax problems.
For any clarifications, get in touch through email.
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Disclaimer
This post is for a general overview and guidance and does not in any way amount to professional advice. Hence, www.taxkenya.com, its owner or its associates do not take any responsibility for the results of any action based on the information in this post or for any errors or omissions. Kenyan taxpayers must always rely on the most current information from the KRA. The tax industry in Kenya is very dynamic.
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