EDITORIAL: Crackdown on illegal tax agents long overdue

Efforts by the National Treasury to rid the market of illegal tax agents are laudable. No government worth its salt has ever entrusted the collection and filing of tax returns to brokers, middlemen and charlatans. That is one of the utmost civic duties of law abiding citizens that can only be done formally and using legally-backed avenues.

That is why we welcome the newly published Tax Procedures (Tax Agents) Regulations 2018 that clearly define who can be allowed to work as a tax agent and imposes two-year jail term or Sh200,000 fine on impostors.

We hope this will restore sanity and mark the end of illegal tax agents who have been using social media platforms to target unsuspecting taxpayers.

But as we laud this latest move, the cardinal question that tax authorities must ask is why thousands of taxpayers would in the first place need assistance to file returns.

The truth is that Kenya has one of the most complex tax systems this side of the world. Individuals and firms struggle to make assessment, pay taxes and file returns.

Think of types and an alphabetic soup of names come to mind: corporate income, personal income, excise, VAT and withholding taxes just to name a few.

And as if that is not enough, the taxes come with different rates, procedures and grounds for payment, waivers, exemptions, zero ratings, refunds and write-offs.

READ: Illegal tax agents risk two years in jail

That compels an average taxpayer to hire an agent, at extra cost, to comply fully with the tax laws. Yet almost every other budget day, the National Treasury has talked of simplifying the tax system to no avail.

Ordinary people expect that the same zeal with which the Kenya Revenue Authority is promising crackdown on illegal agents will be applied on the desired goal of simplifying the tax system.

Otherwise these new regulations risk serving more as professional entry barriers, much to the advantage of accounting bodies such as the Institute of Certified Public Accountants of Kenya (ICPAK) – not offering any relief to the overburdened taxpayer.

To be sure, the new regulations require the tax agents to be members of ICPAK, practising advocates of the High Court of Kenya or former tax administrators with at least 10 years’ experience.

The illegal tax agents must go but also make it possible for individuals and small firms to make self-assessment, pay taxes and file returns without having to seek external help.