What brings us together as Kenyans majorly lies with Football and Deadlines. Kenyans love Deadlines and Deadlines love them back. They love working with each other most of the times too. Speaking of Deadlines they should be part of our National symbols and even entrenched in the Loyalty Pledge. Wait! Do kids still recite the loyalty pledge in school parades? Why did it sound difficult to us then, hehe. Anyway, aren’t we just loyal to deadlines?
Dear Kenyans, since when did Papa (Shirandula) appear on our TVs soliciting us to file our tax returns? Typically, we turned a deaf ear, blind eye and moved on to more important things ignoring the fact that Karma was alive and kicking and that a day would come when we will waste days hinged on stagnant queues begging for assistance. Those days have come home to roost. Just this week, here we were taking off days or closing down our businesses to rush to Huduma Centers and I Tax support centers to impatiently line up pulling remorseful faces and going back home having not got any assistance. We stared at those tired and demotivated faces from KRA personnel taking a century to find letters Q & F in the dusty keyboard and waiting even longer for I Tax website to process a single command. The elderly staff donning those multicoloured fat ties and oversize suits clearly looked overwhelmed by the crowded halls of humans who seemingly have a soft spot for deadlines. But seriously who still strangles his neck with a fat tie the size of a mother’s union kitambaa. We complained and threw tantrums in these stuffy halls together with hundreds of other laidback taxpayers because misery loves company, and demanded to be explained as to why there were clouded inefficiencies in these offices.
But to be fair to KRA, they took about 5 months sensitizing us to file our returns. The very educated Kenyans but perceived to be busy too (really) didn’t care a thing nor have time for such flimsy requests from government. We dismissed Papa’s ads and got submerged to more family talks at that crucial time before 9pm news. We went ahead browsing on our phones if not preparing supper or catching up with the day’s newspaper or retiring to bed early. We laughed at the poor bachelor who missed on marrying the love of his life for not filing his returns. The shocker he got from Papa is the same shocker that compelled us to make frantic calls to a Mr. Chris, the only accountant we know of to help matters. Unknown to us, Mr.Chris was making a kill from our procrastination-mentality and casual reasoning. Of late he has been laughing all the way to the bank cashing in from many of us who have a genetically modified problem of working with deadlines.
The very peculiar Kenyans who have each, half a dozen briefcase companies for no apparent reason, stare at the reality of paying sh.10,000 penalty of every company that didn’t file a tax return by 30th June this year. Moreover, we will also have to pay an extra sh.1,000 unnecessarily for the Individual returns we failed to file querying how worse can be the consequences of defaulting to file! I even know of people who woke up at 12am or made it to the office by 6am to file their returns. From where I’m seated, that’s the shocker the Bachelor in Papa’s ad was battling with. We were not any different, caught flat footed by a Mr.Njiraini (KRA MD) who didn’t bulge or show any sympathy for those who hadn’t made it to the deadline. In any case, KRA put it on record they were targeting 2 million taxpayers (only), meaning the rest will have to prepare to pay penalties. Some crossed their fingers for Mr. Njiraini to extend the deadline but to their shocker (The same in Papa’s ad), that was a non-issue.
We are the same funny taxpayers who sabotaged the I Tax system this week. Predictably, we waited for the very last week and suddenly started running helter skelter to cybers to login to the system. How wouldn’t the system servers not get shocked too if suddenly millions of Kenyans bullied the KRA website with millions of attempted log-ins? Being an accustomed user of I Tax system by virtual of my career, I could tell it would disappoint taxpayers at the very last days. In any case, KRA officials disclosed that 28th June was the only day they witnessed the largest number of successful filed returns where the numbers stood at about 100,ooo. That’s tells you how complacent the system is, meaning, many would-be taxpayers were locked out which wouldn’t be the case if all took Papa’s ad seriously.
But what are consequences of not filing tax returns in Kenya? That’s the elephant in the room and the million dollar question. Arguably, there are no harsh consequences especially to individual taxpayers than they are to companies. Many will not lose sleep for a mere sh.1,000 haha. Call it mere but isn’t it not painful to part with a one thousand shillings note due to negligence and our very typical Kenyanism? The other consequence would be for those who apply for Compliance Certificates. But how many apply and when is it needed in the first place? I’ll come to that shortly. The shocker though comes from the news that KRA has been in active engagement with banks operating in Kenya to cooperate and release bank details of tax payers. If that succeeds and essentially have it that KRA will have powers to demand banks to deduct monies of defaulting taxpayers, that alone will be a game changer. Word has it that KRA is banking on a new law that will give it unfettered access to taxpayers bank accounts to improve revenue collection. If this succeeds one will be put to task in explaining the sources of incomes that find their to your bank accounts that probably don’t reconcile with what you disclose in the Income Tax returns.
They even went ahead to approach Safaricom salivating on millions of Mpesa transactions that process billions of monies, though Safaricom won the first knock out stage citing breach of confidentiality. Pundits have it, KRA will be back at Bob Collymore’s doorstep better armed with a law that will leave Safaricom a helpless opponent. This again is where the can of worms live and prosper. Mpesa will be the next battleground. According to Safaricoms 2015 Annual Reports; Mpesa active customers stood at 13.9million, 6 times more what KRA was targeting. You sense the disconnect. The devil lies in the numbers. This is where the cookie crumbles. If KRA storms Mpesa, millions of Kenyans will have to part with staggering penalties. As back as 2014, Kenyans moved more than Sh.1 trillion in 6 months. You can imagine how much more is moved in 2016!
I promised something about Tax Compliance certificate; you will need it as a requirement for some government jobs, County and Government tenders. The validity of a TCC lasts for 12 months, nowadays applied exclusively via I Tax and normally rejected if you have pending tax returns or have accrued penalties and interests.