Have you been filing your tax returns? How clear and true are your tax return statements? Could you be a victim of professional misadvise? Be keen on how you file your tax return lest you find yourself breathing hot air as the Kenya Revenue Authority ( KRA ) comes to demand from you huge tax liabilities.
There are several benefits of filing your honest tax returns which includes but not limited to: Peace of mind; ease of establishing a business; and also ease of securing a job especially with the government where a certificate of clearance from KRA becomes pertinent.
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Results of non compliance: KRA
On the contrary failure to comply with tax remittance attracts penalties and even law suits from the tax man. It is very much in order therefore that one learns the various areas that can land you into trouble with regard to taxes. Now allow me to inform me on some of these mistakes
- Failure to register which attracts a penalty fine of Ksh. 20, 000 (not exceeding the amount) or imprisonment for a period not exceeding six months or both.
- Failure to submit returns or after the due date or submission of a return without paying the due tax. This accrues a default penalty of Ksh. 10, 000 or the 5% of the tax due whichever is the higher. An additional 2% interest per month compounded is also added.
- Enforced registration where KRA forces you to register which calls for a default penalty of ksh. 100,000.
- Failure to keep proper tax records where a default penalty of between Ksh 10,000 to Ksh 200,000 is charged.
- On fraudulent accounting or filing wrong tax returns by declaring lesser profits. This attracts a fine not exceeding Ksh 400, 000 or doubling the tax evaded whichever is greater between the two. One can also serve imprisonment for a period not exceeding three years or both.
- Failure to issue tax invoice where an automatic penalty of not less than Ksh 10,000, but not exceeding an amount of Ksh 100, 000 is imposed.
- Uttering false statements and lastly is the failure to display a certificate of registration. This attracts a penalty of Ksh 20,000 and a fine not exceeding Ksh 200,000 or imprisonment for a term not exceeding 2 years or both.
Failure to comply with tax requirements can attract very serious charges but as it is many people still continue ignoring their tax obligation.
Wholesaler firm pay fines
A wholesaler firm identified as Paleah Stores Limited is now being demanded to pay to KRA some ksh. 9 billion as tax following an audit of its account. The firm which deals with food and building materials found itself with such huge baggage of tax liability after statements by its bankers and suppliers gave it away.
The company had been under declaring its profits and hence remitting lesser tax. The court has now ordered that it pays all of the arears including penalties from year 2008 to 2014.
it is simple, kindly meet your tax obligations honestly else the tax man comes breathing hard on you.