The Kenya Revenue Authority (KRA) has warned of enforcement actions against tax agents including employers and suppliers whom it says are failing or delaying to remit taxes collected on time.
The taxman said it had noted with concern that some of the taxpayers charged with collection and remittance of agency taxes at times fail to collect or remit such taxes on time as required under the law.
“KRA wishes to reiterate that any person who fails to charge, collect, withhold and remit any agency taxes commits an offence and enforcement action will be taken against such persons without further recourse,” said Commissioner for Domestic Taxes Elizabeth Odundo Meyo in a notice.
“It suffices to note that agency taxes are payable by third parties, the responsibility of the agent is to collect, declare and remit the taxes to the commissioner within the timelines specified in the law. Therefore, any delays in remittance should not arise.”
The taxman, who has perennially missed tax targets, is looking to seal revenue leaks against the backdrop of ever higher collection targets set by the Treasury.
The Treasury expects the KRA to collect Sh1.938 trillion in tax and other revenue in the current financial year, up from the Sh1.58 trillion last year when the original target was Sh1.81 trillion.
Employers, property agents and tenants and banks are some of the parties who act as tax agents.
Employers are required to deduct Pay-as-you-Earn tax from employees' salaries and wages and remit the same to KRA on or before the 9th day of the following month.
The penalty on late filing amounts to 25 percent of the tax due or Sh10,000 whichever is higher, while fine on late payment amounts to five percent of the tax due and a late payment of one percent per month on the unpaid tax until it is paid in full.
Professional fees, winnings from betting and gaming, dividends, interest on deposits, insurance commissions, consultancies and agency services and telecommunication services also attract withholding tax which should be deducted and remitted on or before the 20th of the following month.