Frequently Asked Questions About KRA and Their Responses

19 January 2024

[KRA/The Standard]

Written by Pharis

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The Kenya Revenue Authority (KRA) plays a crucial role in Kenya's economic engine, collecting taxes that fund essential services and fuel national development. But navigating the intricacies of taxation can be daunting, leaving many with burning questions about their obligations and rights.

Fear not, tax-paying citizen! This comprehensive guide tackles the most frequently asked questions about KRA, empowering you to navigate the tax landscape with confidence.

1. What is a KRA PIN and why do I need one?

Your KRA PIN (Personal Identification Number) is your unique tax identity, akin to a social security number. It's mandatory for any individual engaged in any taxable activity in Kenya, including employment, business ownership, or property rental. Obtaining your PIN is free and straightforward, you can do it online at the KRA website or visit any KRA office.

2. What taxes do I need to pay in Kenya?

In Kenya, individuals are subject to various taxes depending on their income sources. The most common are:

• Income Tax: A progressive tax levied on your taxable income, with rates ranging from 10% to 45%.

• Value Added Tax (VAT): A 16% tax added to the price of most goods and services.

• Withholding Tax: A tax deducted at source from your salary or other income by your employer or payer.

• Excise Duty: A tax levied on specific goods like alcohol, tobacco, and fuel.

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3. How do I file my tax returns?

Filing your tax returns is crucial to fulfill your tax obligations and potentially claim any refunds due. You can file online through the iTax platform, a user-friendly interface accessible with your KRA PIN and password. Alternatively, you can visit any KRA office to file manually.

4. What are the deadlines for filing tax returns?

Individual income tax returns must be filed by June 30th of the following year, while corporate tax returns are due by September 30th. Missing these deadlines can attract penalties, so don't procrastinate!

5. Can I claim any tax deductions or exemptions?

Yes! Several deductions and exemptions can reduce your taxable income. Common examples include contributions to pension schemes, medical insurance premiums, and education expenses for dependents. Be sure to consult the KRA website or a tax advisor for a comprehensive list of applicable deductions.

6. What happens if I can't pay my taxes?

Facing temporary difficulty paying your taxes doesn't automatically brand you a villain. KRA offers various mechanisms to ease the burden, including installment payment plans and penalty waivers under specific circumstances. However, neglecting your tax obligations will eventually lead to legal consequences.

7. How can I report tax evasion?

Witnessing tax evasion? Don't be a silent bystander! KRA encourages whistle-blowing through its confidential hotline or online platform. Your information can help crack down on tax cheats and ensure fairness in the system.

8. What resources are available to help me understand my tax obligations?

KRA provides a wealth of resources to demystify the tax code. Their website features comprehensive FAQs, tax guides, and downloadable forms. Additionally, you can seek assistance from tax advisors or consult legal professionals for more complex situations.

9. How can I stay updated on changes in tax laws and regulations?

Tax laws and regulations are subject to change, so staying informed is crucial. Subscribe to KRA's email updates, follow their social media channels, or visit their website regularly for the latest news and announcements.

10. Can I appeal a tax assessment I disagree with?

If you believe your tax assessment is incorrect, you have the right to appeal. KRA has established procedures for dispute resolution, allowing you to challenge the assessment and seek a fair outcome.