Introduction
Early this month of August 2017, KRA put up a public notice that taxpayers who have not migrated to i-Tax platform will be deactivated. Besides, all taxpayers who file nil returns or have failed to file tax returns for the last three (3) months will be deactivated.
Implications
This means the personal identification numbers (PIN) will not be active. Hence, no transactions that require PIN such as business transactions such as opening bank accounts, participating in tenders.
Besides, personal transactions such as admission to some schools for children, opening electricity accounts, mobile phone accounts, etc.
Effectively, the deactivated persons cannot conduct any businesses that require PIN. However, note that the public notice is for de-activation of the PINs.
Does the Commissioner have powers to deactivate the PINs?
Under the VAT Act (2013) Section (37), the Commissioner can cancel VAT registration for any registration offence. The following are the 3 key offences:
- Keep proper records,
- Furnish regular and reliable tax returns,
- Comply with obligations under other revenue laws (income tax, excise duty),
Failure to make tax returns is a VAT Act (2013) registration offence. Remember, the VAT obligation is indicated in the PIN certificate.
The Section also explains that upon conviction, there is a fine not exceeding Kshs 200,000 or a jail term not exceeding 2 years or both.
By deactivating the PIN, the Commissioner is sparing the taxpayers’ cancellation of the certificate, the possibility of paying the fines, appearance in court, and possible jail terms.
Way forward for affected taxpayers
- Migrate to the i-tax platform before the deadline.
- File the tax returns before the deadline.
- Comply with the tax requirements.
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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.
