Tax defaulters face KRA deadline or risk auctions

Individuals and businesses have until end of this month to apply for amnesty on defaulted taxes or risk seizure and auctioning of their property.

The Kenya Revenue Authority (KRA) last week gave the defaulters who owe an estimated Sh250 billion in tax arrears up to August 30 to apply for the waiver on penalties and interest.

Businesses and individuals seeking the waivers must meet the requirements in line with the Tax Procedures Act of 2015 that gives KRA’s Commissioner of Domestic Taxes power to waive penalties and interest.

Under the law, individuals and businesses must provide proof of financial distress that shows inability to pay the penalties or interest accrued or prove that KRA erred in slapping them with the fines.

“KRA has finalised the roll out of the system enhancements for processing of the waiver applications and has embarked on clearing the backlog of the applications,” read a notice by Elizabeth Meyo, KRA’s Commissioner for Domestic Taxes Department.

“The applicants will be required to submit supporting evidence within a period of 30 days.”

The KRA warned that it will demand full payment of the penalties and interest accrued by individuals and businesses who fail to submit supporting evidence for the waivers ahead of the August deadline.

The taxman had last year said it had identified the tax cheats as it intensified efforts to nab defaulters in its race against time to stem its perennial missed collection targets.

Besides the penalties and auctions, other enforcement actions the taxman can take include disabling of personal identification numbers (PINs), issuing travel bans on suspected tax cheats, collecting duty directly from suppliers and bankers of defaulters and prosecuting those in arrears.