Tax is a debt due to the state but many people do not know that. This is despite that issue being addressed under various statutes. The question of what tax is to the government is addressed under Section 32 of the Tax Procedures Act (2015).
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What is tax?
This section states that a tax paid in Kenya under any tax law is a debt due to the government. This means that all taxes, whether Value Added Tax, Income tax, Domestic Excise duty, and Customs taxes and duty, are all due debts to the government.
Who collects the tax debt?
The tax debt is payable to the tax Commissioner, indicating that the government does not collect the tax directly. The tax is collected on behalf of the government by the tax authority. Hence, tax money does not belong to KRA, but it belongs to the government.
KRA only collects the money and remits 100% the tax money and does not retain even a single cent. KRA is latter paid a commission for work done to collecting the tax. Currently in the country, it is only KRA that is mandated with the task of collecting and remitting the tax to the government.
This means that a taxpayer cannot pay the tax directly to the government.
For illustration only I Source: Pixabay
How is the tax debt paid
Tax is paid to KRA electronically. There are two ways of paying tax debt. A taxpayer can pay the tax using either
a. Mobile money or
b. Through the banks appointed by KRA as tax-collecting banks.
The money is then transmitted to the government. Hence, a taxpayer cannot pay taxes to manually. A taxpayer cannot walk to the government’s tax-collecting agent and deliver hard cash money. It has to be delivered electronically.
How else can the tax debt be paid?
The tax Commissioner can authorize a person to pay tax in any other method apart from electronically. This means taxpayers can be authorized to pay hard cash to the tax Commissioner.
However, the authorization must be in writing, not done verbally. In such cases, the authorized taxpayer is advised to ensure that the letter is retained for future reference.
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Thank you for reading the post.
Dr. Wakaguyu wa-Kiburi
