The tax filing season has hit fever-pitch and most Kenyans are scrambling to comply with this annual requirement of reporting their fiscal year affairs. It may not be the greatest thing to pay taxes but it feels good to show that indeed you gave Caesar what belongs to him.
Yet most of us pay taxes and file returns more to meet legal obligations than it being the moral thing to do. And you cannot fault such people. First, the tax filing procedure remains complicated despite Kenya Revenue Authority’s (KRA) efforts to simplify it over the years.
The paper work after paying tax or charging tax is stuff for only accountants and tax experts to understand. This puts off many from filing monthly or annual taxes, the consequences notwithstanding.
Companies and high-net worth individuals often hire consultants to sort their tax issues. Others let it be not through ignorance but because of the tedious (or sophisticated) procedures involved.
Also, there is confusion on who should file tax returns and this appears a deliberate vagueness from KRA side. These days everyone – from students to farmers – is required to have KRA PIN number to make certain transactions possible.
Problem is whenever someone registers with KRA, they are automatically listed on the tax paying obligation without necessarily being informed that they are required to file annual returns.
Students suddenly find themselves owing KRA fines, running into tens of thousands, for not filing annual returns, something they did not even know about.
More awareness is needed especially among the non-working PIN holders. KRA should have a way of explaining to new applicants on their obligations, so they make informed decisions based on their specific situations. Majority of applications are done online in cyber-cafes without checking out on the individual’s obligations.
These shocks contribute to ingraining the negative attitude on paying taxes and KRA itself and its staff. Besides, how tax collections are utilised plays a major role in motivating people to pay and, indeed, file tax returns with pride and in time.
Revelations of scandal after scandal of theft of public funds through corruption over the years makes paying taxes look like being robbed. This has a heavy – and obviously negative – psychological impact on the tax paying public.
The government should think twice before roundly condemning and harassing those who don’t file but appreciate the entire tax food chain and its attendant effects. Otherwise, soon KRA will be raising more money from fines than real collections. – The writer is Managing Editor of Business Today. Email:[email protected]