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Businessmen to lose PIN if they don’t file returns

By People Team
Tuesday, May 4th, 2021 00:00 | 3 mins read
A KRA staff assists a member of the public to file tax returns at the at Sarit Centre in Nairobi, recently. Photo/PD/Courtesy

Noel Wandera and Lewis Njoka

Entrepreneurs are set to lose their personal identification numbers (PINs) if they do not file their tax returns by the end of this month.

A notice from the Kenya Revenue Authority (KRA) yesterday further indicated that those who fail to comply at the end of the stipulated period would be deregistered from the KRA system.

“Failure to file tax returns, unless cause is shown to the contrary, the Commissioner of Domestic Tax shall have their Personal Identification Numbers (PINs) deregistered and cancelled from the KRA system at the expiry of thirty (30) days from the date of this notice,” said KRA.

And in order not to be caught up in the mix, KRA is encouraging taxpayers to take advantage of the voluntary tax disclosure programme and apply, disclose and pay their outstanding liability with relief on interest and penalties.

Michael Mburugu, a partner with tax firm PKF reckoned that the KRA’s pronouncement was an enforcement measure that was partly aimed at cleaning up the tax system.

“I think what KRA is trying to do is to give an opportunity to taxpayers to declare whether their accounts are active or not.

If you are not trading, you can’t be punished as there is nothing expected of you to file anyway,” said Mburugu.

According to Mburugu, there are many old and retired people who are no longer in employment, and the right thing to do was to put their PINs under dormancy.

“My view is deal with each one of us on a case by case basis, which will give people a chance to get themselves out of that list,” said Mburugu.

A PIN is a security code for verifying one’s identity. Similar to a password, a PIN allows access to important services such as financial transactions.

The most popular transactions that require PIN include registration of title, stamping of instruments by the Commissioner of Lands and payment of land rent; approval of plans, payment of water deposits, application for a business permit, payment of land rent by Local Authorities among others.

Last month, Commissioner of Domestic Taxes Rispah Simiyu said tax returns for the final phase, which ends on June 30, 2021 will be done digitally because of the Covid-19 pandemic which has restricted physical visits to public facilities.

January 1st, 2021 marked the beginning of the tax return filing season for the 2020 year of income.

All annual returns for the year 2020 for individuals and entities with a December year-end are due through the iTax platform on or before June 30, 2021.

Their warning comes hours after it announced that it had exceeded its revenue targets for the month of April by Sh6.5 billion after collecting Sh176.7 billion against a target of Sh170.2 billion.

The amount is a 23.9 per cent growth in revenue compared to April last year when the taxman collected Sh144.06 billion.

This is the fifth month in a row KRA has exceeded its targets since December 2020 despite the slow economic progression brought about by Covid-19 pandemic.

The authority attributed the good performance to unrelenting compliance efforts and enhanced surveillance.

“The good revenue performance has been enhanced by the sustained implementation of compliance efforts, revenue enhancement initiatives and improved service delivery to taxpayers, which has led to improved voluntary compliance,” said KRA in a statement.

“Additionally, the remarkable performance is also attributed to enhanced active surveillance and enforcement, which has been supported by KRA’s investment in technology,” it adds.

In the recent past, KRA has acquired integrated scanners, which have improved levels of compliance at the border points by plugging revenue leakage points.

Customs and border control department recorded a performance of 112.1 per cent posting Sh54 billion against a target of Sh48.2 billion.

Further, KRA leadership have also recently focused on internal performance management aimed at enhancing staff productivity in driving revenue collection initiatives.

Domestic taxes registered a performance of 100.2 per cent collecting Sh122.2 billion against a target of Sh121.6 billion.

“Domestic Taxes performance was largely attributed to the excellent performance recorded by Corporation Tax, which registered a performance rate of 116.9 per cent. Corporation Tax collection

stood at Sh39.945 billion against a target of Sh34.181 billion,” said KRA.

Pay as You Earn (Paye) registered a 5.3 per cent growth to reach Sh36.95 billion while withholding

Income surpassed target by Sh1.5 billion to stand at Sh12.1 billion, a 21.4 per cent growth.

Excise domestic tax collections surpassed April target by 25.7 per cent to stand at S4.97 billion

exceeding target by Sh311 million.

KRA is implementing a number of revenue enhancement measures including tax base expansion,

Enhancement of debt recovery programme, implementation of post clearance audits, comprehensive audit of all exemptions among others.