Thursday, February 09, 2012

Educating Taxpayers

Do you have questions about taxes? How to calculate Value Added (VAT), Withholding, or Pay As You Earn(PAYE) or other taxes? When to assess them, and where to pay them? It's not just large corporations who are unsure on how much tax to pay, but such questions also apply to small business owners & ordinary citizens who are all taxpayers.

The Kenya Revenue Authority (KRA) has seminars and sessions for taxpayers almost every week. There are two kinds of these, one for their online system held on most Thursday's in all the major towns (Nakuru, Eldoret, Naivasha, Meru, Kericho, Malindi, Machakos, Embu, Nyeri, Kisii, Thika, Kakamega, Kisumu, Mombasa, Nairobi) and others for new taxpayers held in the same towns as well as Bungoma, Lamu, and Voi with emphasis on introduction to VAT and income tax rights and obligations.

The classes all have Q&A sessions in which many questions are asked. This is very useful as it's better to ask them there, without consequences, than ask them when you have a tax inspector visit your business premises!

Right now KRA is running dual systems - manual and online with different taxpayers using either method to file various tax returns, monthly, quarterly, or annually. It's their intention to make more online filing mandatory for taxpayers and this will be done in a phased manner.

The goal of this is to have a more efficient tax collection system and because it's more effective to get taxpayers to cooperate than to coerce them. Also getting more people to file their tax returns online from cyber cafes or from their business premises, will result in fewer people having to queue to pay taxes at KRA offices.

Business people who bank with National Bank, Cooperative Bank and to a lesser extent KCB also have some filing advantages as these banks have invested in systems that are compatible with KRA's and so payments made at these banks are automatically reflected as their tax filings.

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