TWO MONTHS TO DEADLINE

Review of penalty by treasury makes tax compliance cheap

Even with the review of the penalty for defaulters, every cent is valuable in current economic times

In Summary

• Penalty was reviewed last year from Sh20,000 to Sh2,000. 

• KRA's iTax platform has made it easier to file returns. 

Kenya Revenue Authority mobile car
INCREDIBLE OPPORTUNITIES IN TAX COMPLIANCE: Kenya Revenue Authority mobile car
Image: FILE

Last year’s decision by the government through the National Treasury to review the penalty for individual defaulters of tax return filing from Sh20,000 to Sh2,000 was the best deal taxpayers ever got.

The review was among the proposals in the 2018-19 budget statement presented by the National Treasury CS Henry Rotich. Despite the previous penalty being a strong deterrent for non-compliance with tax regulations, it was too high for the ordinary citizen. Its review was, therefore, very considerate of the government, a move that most if not all taxpayers welcome with open hands.

With about two months left before this year’s filing season comes to a close, taxpayers who are yet to submit their returns should do this before the June 30 deadline. While Sh2,000 may not be scary enough to discourage late filing, we are living in turbulent economic times where every coin counts.

Apart from the value of the penalty, compliance with tax regulations is cheaper than non-compliance. In the modern day, tax compliance has become a key ground in many realms such as during job recruitment, appointment to a public office and tender applications among other crucial services. Imagine an opportunity of a lifetime slipping through your hands because you are not tax-compliant!

Additionally, Kenya is arguably one of the African nations that have heavily invested in modern tax administration technology which has, in turn, made tax compliance easier compared to some years back.

Kenya Revenue Authority’s iTax platform, for example, is one of the technologies that have significantly revolutionised tax administration in Kenya. Taxpayers can file their returns and pay their taxes from any corner of the world.