KRA Issues Tax Demands
KRA Issues Tax Demands. The Kenya Revenue Authority (KRA) is actively striving to boost tax demands from businesses. In response to their objective of reaching a revenue target of Sh2.7 trillion by the end of this fiscal year, they have deployed enforcement teams and officers with paramilitary training for tax compliance.
As a result, the issuance of tax demands promptly followed within just three weeks of implementing these measures. To clarify, a tax demand serves as a formal request to settle taxes. Furthermore, as inspection visits become more rigorous, we anticipate the frequency of these tax demands will increased.
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Meanwhile, the KRA has requested crucial documents from businesses, encompassing permits, financial records, and agreements. Non-compliance with this request will prompt the KRA to take proactive steps, including estimating income, issuing supplementary assessments, and initiating enforcement procedures as per section 29 of the Tax Procedures Act of 2015.
An In-Depth Compliance
Concurrently, the KRA’s officers, known as revenue service assistants (RSAs), are actively engaged in online business registration. These 1,400 officers, who completed their training at the Kenya Defence Forces Recruits Training School in August, are currently responsible for implementing the Electronic Tax Invoice Management System (eTIMS) to enhance VAT revenue collection.
Furthermore, the RSAs actively conduct market surveillance, identify unregistered traders, and regularly patrol to ensure traders provide proper tax receipts.
As part of their comprehensive approach, the KRA is proactively targeting the challenging-to-tax sectors of the economy, primarily encompassing small and medium enterprises. They are diligently working to bridge the gap and ensure these sectors contribute their equitable share of taxes.
Typically, these sectors challenging to tax exhibit informality, inadequate record-keeping, and limited transaction visibility. Moreover, many businesses in these sectors erroneously assume they are exempt from taxes on self-generated income.
Notably, this category places particular emphasis on the informal sector, agriculture sector, and the digital sector. The government is concurrently evaluating an array of measures, including leveraging information technology, collaborating with county governments for data sharing, and introducing sector/location-based presumptive taxes to foster fairness and equity.