Companies under more pressure to comply on tax
12 months ago, 2 Jan 17:39
Companies and individuals are facing intensified scrutiny for non-compliance with tax payments and filing regulations following the full implementation of iTax, the electronic filing system. Sage International, a multinational software provider including payroll applications, says in its latest report on East Africa that the Kenya Revenue Authority (KRA) was increasingly clamping down on firms over non-compliance with laws and regulations around Pay As You Earn taxes. Sage director for East Africa Nikki Summers said the KRA was scrutinising more closely whether employers are complying with their tax obligations in the wake of below-target revenue collections, which has also partly resulted from economic slowdown. “Without improving tax collection, East African countries will not be able to effectively finance the building of infrastructure and the provision of public services,” Ms Summers said in a statement. “We are seeing Tanzanian and Kenyan tax authorities take a more robust approach to registering taxpayers and enforcing compliance to help the governments meet their tax collection targets.” She added that even errors could cost firms as they are deemed to be noncompliant. “Failing to comply — whether through deliberate evasion, late payment of payroll taxes underpayment as a result of a miscalculation — could cost your business dearly,” says Summers. Deloitte East Africa tax partner Nikhil Hira said the tough stance adopted by the taxman was not entirely new, only that it is now being automated and therefore easier to make follow-ups with those who do not comply. “I guess to some extent it (the scrutiny) is new because under iTax system, if you don’t file your tax returns on time, the system automatically generates a penalty. It alerts you straight away that you are late,” Mr Hira said on phone. “The follow-up is more stringent than what it was in the past only because it is now automatic.” The agency is under pressure to meet the revised Sh1.44 trillion revenue collection target this financial year to June.
Category: business news corporate lifestyle economy opinion markets