Remember to file your tax returns in good time

The Covid-19 pandemic has substantially disrupted business continuity and in the process, defined a new normal. Most operations have been migrated to virtual platforms to ensure business continuity even at the minimal. The pandemic has hit the country at a time when the annual tax returns filing exercise starts to gather momentum.

The Kenya Revenue Authority (KRA) is among government agencies that handle the biggest number of walk-in customers. A few years ago, the numbers would grow monumentally during the filing season as taxpayers visited KRA offices countrywide to submit their tax returns. This was before KRA automated returns filing and tax payment through the iTax system.

As we continue to heed the call to stay at home so as to avert the spread of Covid-19, it is an opportune time to reflect on the past year of income (2019) and file our tax returns on or before the deadline on 30th June 2020.

It is important to note that despite the pandemic at hand, we still have a responsibility as citizens to meet our tax obligations and, in particular, filing of tax returns and accounts, and payment of taxes arising thereon. KRA has continually and progressively enhanced the iTax system based on user reviews resulting in improved and better customer experience.

Notably, the tax returns filing for persons with employment as the only source of income has now been simplified into a few steps. This category of taxpayers can now file their tax returns using the auto-populated function on iTax where essential details required are pension contribution, mortgage interest, Home Ownership Savings Plan, insurance relief and where applicable, Exemption certificate for persons living with disability(PWD), and personal relief.

This process takes an average of less than five minutes. Taxpayers with other supplementary sources of income including but not limited to rent and business are however required to file their tax returns on the excel sheet available on iTax.

PIN holders who did not have any income during the 2019 year of income are expected to file a Nil return, as a declaration to the Commissioner that there was no income earned over that period.

Majority of university and college students who registered for KRA PINs for purposes of applying for a loan from the Higher Education Loans Board (Helb) fall under this category.

The process has further been simplified for Nil filers as they can now submit a Nil return using the iTax mobile application available on Google Play Store. KRA is in the process of enhancing this application to accommodate other iTax operations for a better user experience.

Why is it important for taxpayers to file tax returns? There have been several misconceptions surrounding tax returns. Some taxpayers with employment income, for instance, deem the exercise a repetition of the monthly Pay As You Earn (PAYE) filing by the employer.

Most taxpayers wonder why they should file for returns that were already filed by their employers. First, when an employee files a tax return, it serves to balance the entries filed by the employer every month in the course of the year that was.

That way, it becomes easier to put checks on employers who deduct PAYE from their employees but fail to remit to KRA.

Secondly, some people engage in additional income generating ventures commonly referred to as side- hustles. Filing of annual tax returns therefore gives such taxpayers an opportunity to declare their additional sources of income. Finally, returns filing is a legal obligation that is critical in tax compliance management. This explains why even a Nil return counts for those without any source of income.

Employers continue to play a crucial role during tax returns filing season. They are the issuers of P9 forms, which detail tax deduction of employees for a given year of income. A P9 form is therefore important during filing as it acts as a reference point. Employers should therefore ensure they issue the p9 forms to their employees in good time to facilitate the exercise.

In the wake of the Covid-19 scourge, which has struck during the current filing season, KRA has put in place a raft of measures to ensure effective facilitation of taxpayers who may need virtual assistance in returns filing. First, there is a call centre team on standby to assist taxpayers who might need guidance at one stage or the other. Secondly, KRA continues to share updated ‘how-to’ guides across our social media platforms. The guides have been developed to address various issues based on frequently asked questions by the taxpayers.

The writer is Commissioner of Domestic Taxes at KRA.