The tribunal ruled that KRA had erred in registering Dr Ndii without first notifying him.
“The tribunal notes that there is no documentary evidence to show that the respondent (KRA) wrote to notify the appellant about the registration and cannot therefore retroactively demand for tax for the period under review,” it ruled.
The tribunal heard that KRA had accessed Dr Ndii’s bank accounts to establish his financial dealings. Banks now form a key plank in KRA’s latest approach that emphasises on data gathering from third parties like the motor vehicle registration unit, property approval agency and Kenya Power bills in the war against tax evasion.
The information sought includes account balances and flow of income. This enables authorities to check whether taxpayers have correctly declared their income.
The Tax Procedures Act compels all such third parties to share information with the taxman. Those that defy KRA’s orders are liable to a fine of Sh1 million or a jail term of three years or both should they fail to provide details to the taxman.
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