• The law requires individual taxpayers to file annual income returns for a good reason
• KRA has done well to facilitate taxpayers during each filing season
After changing jobs in February 2018, Agnes finally decided to call it quits and started her own business in December of the same year. She had gained valuable experience as an office administrator for over 10 years. It was time to get into making money on her own. Taking advantage of her clerical prowess coupled with her being a stickler for cleanliness together with adherence to keeping deadlines, she decided to start a laundry at her estate.
Strangely but somewhat satisfying, one thing that she has always been proud of is filing her tax returns way ahead of time. "My friends only seem to remember when it's about two weeks to the deadline and they like to come to me for help.” she once told me.
“Although this has gradually changed over the last three years because people are understanding the system even better now." she said. "However, this year, I had an encounter with a customer that reminded me why filing tax returns is important" Agnes continued.
One of her customers named Opiyo had brought in a suit for cleaning. As she emptied the pockets, his folded pay slip fell from the inside.
"Wow!" he exclaimed. "Another piece of evidence showing me how much more I do not know where my money goes" he remarked.
"What exactly do you mean, sir?" Agnes replied respectfully, pretending not to know that what she had seen was clearly his pay slip. She knew this because she always kept her boss' pay slip that was produced using Aren payroll system and the look was unmistakable.
"See this paper? It says how much money goes out before I even touch it. Pay As You Earn (PAYE). You've probably never seen such because you are self-employed." he replied.
Recognizing that Opiyo hadn't bothered to investigate her background, Agnes tactfully constructed her answer. "Sir", she started with a slight smirk on her face. "I am aware that we all are required to give to Caesar what belongs to Caesar and I think I know better that if we don't, our country simply won't have money."
"Ha!" he laughed. "Don't be ignorant my dear." Opiyo continued. "Don't you understand what I am saying?" he said
"My point is this, why should I, as an employee, declare my income for a given year and file individual annual income tax return? I strongly feel that the monthly Pay As You Earn deduction by my employer should be final because my employer declares, files and pays the tax on my behalf. Why are we replicating tasks?" he continued. "Do you think you can answer that?"
She smiled as she kept away his suit and began to write his invoice.
"One navy blue suit, sir? Express service so that you should collect it this evening?" she asked
"Precisely" he responded
"Great. Now then" she started, "The law requires every individual taxpayers to file annual income returns for a very good reason. You see, sir, it gives the Kenya Revenue Authority (KRA) a chance to verify if what your employer declared in their PAYE monthly submissions matches what the taxpayer has declared for a given year of income."
"Bah! How do you know this?" he interjected.
"Opiyo is the name, correct?" she replied, writing his name on the invoice.
"Opiyo Jakadongo", he appended
"Thank you. Mr. Jakadongo sir.”, she responded.
“I know this because I was employed as an office administrator for 10 years. I learned the importance of it quite early. Now then, in case of a disparity between your employer and you within the two declarations, steps will be taken to address it. It also works out to improve accountability and transparency, so that your employer doesn't deducts PAYE from you but fails to remit it to KRA."
"Oh! Well then, ignorance is not bliss" he said, justifying himself. “I didn't know. Errr...”
"One more thing before you leave sir, you've seen long queues when filing your returns close to the deadline, correct?" she asked
"Yes." he replied. "We Kenyans are peculiar, but that's changing I believe. We're getting used to running away from the penalty rather than doing it late"
"Indeed! I've seen it with my friends over the last few years as well." she replied. "Actually, that's why KRA has really tried to facilitate all the taxpayers during every filing season. Have you seen the multiple service centres and desks at Huduma Centres? That's what they are for. In fact, they've been working long hours so that they optimize service delivery. Their service centres are open till 9pm on weekdays and till 1pm on weekends. And for those procrastinating Kenyans, on the 29th & 30th of June, the service centres will be open till midnight"
"Ha! To help Kenyans with these peculiar habits, I suppose?" he joked
"Haha! Yes sir. However, as you said, ignorance is not bliss" she replied.
"Listen, I have to run. Thanks so much for the information Agnes. Shall I collect my suit this evening at 5PM?" he asked
"Sir, just for you, I shall extend my working hours so that I can optimise my service delivery in case you come late because of traffic"
They parted with a laugh. Agnes knew she had educated yet another Kenyan on the beauty of filing tax returns.