Zachary Ochuodho @zachuodho
Thousands of people yesterday flocked to Kenya Revenue Authority (KRA) support centres as they made a last-minute rush to beat the deadline for filing tax returns set for June 30.
KRA officials revealed that about 2.5 million individuals had by Wednesday morning filed their 2017 income tax returns. About 1.7 million individuals filed last year.
Filing of tax returns is one of the taxman’s favoured avenues to net tax cheats and grow the income tax segment as the agency struggles to meet collection targets. Kenyan law requires everyone with a Personal Identification Number (PIN) to file returns annually – including a nil return.
KRA Tax Procedures Act 2015 prescribes a Sh20,000 penalty from Sh1,000 for any individual income tax return filed after the June 30 deadline and an interest of one per cent of the tax due. Judith Njagi, KRA’s chief manager for domestic taxpayer services advised those who have not filed their tax returns to do so to avoid paying the penalties and interests.
She said that filing tax return gives KRA an opportunity to verify if what the employer declared in their Pay As You Earn (PAYE) monthly submissions matches what the taxpayer with employment income has declared for a given year of income.“It is made so that in case of any disparity between the two declarations, steps are taken to address the anomaly,” Njagi said.
She said that filing of an individual annual income tax return also provides an opportunity for employees with additional sources of income to declare the extra sources of income at the end of every year.
“Additional sources of income include rental income, consultancy, farming or any other businesses. Taxpayers are required to declare any additional income and pay the tax due by April 30 and subsequently file the return by June 30,” Njagi added.
She said that monthly rental income is payable at 10 per cent of the gross residential rent received on a monthly basis for each taxpayer (including employees) receiving a residential rent of Sh10 million and below in each year of income.
Early filing of tax returns, Njagi said, has a lot of benefits to individual taxpayers as it provides individuals with enough room to seek clarification or any form of assistance from the taxman.