Taxpayers have been reminded by the Kenya Revenue Authority (KRA) to file their Annual Tax Returns for the year 2020 so as to avoid related penalties.
The exercise is meant for individual taxpayers and business entities whose accounting period runs from January to December.
A statement by Commissioner for Domestic Taxes Department at KRA, Rispah Simiyu, reminded individuals with employment income that they require P9 forms issued by their employers to file their tax returns.
“It is, therefore, paramount that employers issue their employees with P9 forms in good time for timely filing of their tax returns. Those with business income should have their books of accounts and financial statements for reference when filing their returns,” read the statement in part.
Simiyu further directed that Business entities whose accounting period corresponds to the calendar year are further required to pay their balance of tax for the year of income 2020, by April 30, 2021.
She noted that for entities running a different accounting period, the balance of tax should be paid on or before the last day of the fourth month after the close of the accounting period. The filing deadline for such entities is the last day of the sixth month after the accounting period.
Submission of all tax returns is done online on KRA’s iTax platform (http://itax.kra.go.ke). In addition to filing of tax returns, iTax is the gateway to conducting other tax business such as PIN application, tax payment, taxpayer ledger maintenance, application for tax compliance certificates, application for waivers and payment plans, among others.
iTax is among various technological advancements that KRA has put in place to enhance efficiency and simplify the tax administration process.
“KRA has continuously made deliberate efforts to simplify the process of filing tax returns for enhanced user experience. For instance, taxpayers with employment income only can now use the simplified web based pre-populated income tax return, labelled ‘ITR for employment income only’ on iTax to file their returns,” she explained.
Simiyu added that to further simplify tax processes, KRA has also introduced a mobile phone application known as M-service which enables taxpayers’ access to various services offered by the Authority such as taxpayer registration, filing of returns and payment of taxes.
“Taxpayers who did not have any income last year can use the M-service application to submit a Nil-return. Simplification of tax processes translates to higher compliance among taxpayers, hence KRA’s continued commitment to simplification of its processes,” read the statement sent to newsrooms today.
She explained that filing of one’s tax return is important since it is a declaration made to the Commissioner of the income earned or generated over a given period, asserting that contrary to popular belief, a Nil return constitutes such a declaration as well, hence the requirement to file one where appropriate.
In addition to tax payment, she said, filing of tax returns is a key tenet of tax compliance which KRA considers in the issuance of a tax compliance certificate and is often a requirement when seeking employment or business opportunities, especially in public institutions.
Individual taxpayers who fail to file annual tax returns within the stipulated time frame will be liable to a penalty of Sh 2,000 or five per cent of the tax due, whichever is higher. Non individual entities on the other hand are liable to a penalty of Sh 10,000 or five per cent of the tax due, whichever is higher, for late filing of returns.
By Alice Gworo