How social media tools have inspired tax compliance and other tax updates
Kenya Revenue Authority confirmed the rise in the number of taxpayers verifying their tax status. This has been attributed to the active utilization of technological solutions such as social media tools.
KRA Deputy Commissioner in charge of Marketing and Communications Ms. Grace Wandera explained that the adoption of technological solutions helped raise awareness of filing returns.
Social media posts inspiring tax compliance
She further stated that KRA is steadily adopting modern technological ways of mobilizing revenue strategies to increase tax compliance.KRA has already adopted blockchain, Artificial intelligence, Machine learning, and Data mining contemporary technologies to spearhead this strategy.
Ms. Wandera praised Kenyans on Twitter (KoT) as well as other content creators who drove the conversation around filing taxes with engaging and witty content.
“Within the confines of the law, we do apply social media scans among other technological tax compliance surveillance systems. This week we have seen a more than 60% rise in the number of tax compliance certificated applications lodged on the online i tax platform” Ms. Wandera Said.
“The spike is commendable as it means Taxpayers are willing to comply, and KRA is at hand to provide the necessary support. KRA is a very dynamic organization that will continue providing tax facilitation services to boost compliance.”
Thanks to technological tools, KRA collected Ksh.154,383 billion against a target of Ksh 142,285 Billion, recording an impressive 108.5% performance.
Application for Tax relief schemes now Automated
The Kenya Revenue Authority has automated applications of tax relief schemes and tax exemption certificates in an effort to improve efficiency and raise compliance.
Automation of Application for Registration of Tax Relief Schemes
What is tax relief?
Tax relief refers to a government program or policy designed to help individuals and businesses reduce their tax burdens or resolve their tax-related debts.
It allows you to deduct some payments you make during the tax year from your gross income so there is less for you to be taxed.
The taxman announced that retirement scheme benefits, collective investment schemes, unit trusts, employee share ownership, and real estate investment trusts that wish to register will make the application through the taxpayer portal on the i tax platform.
This move is aimed to increase KRA involvement in the declaration of returns in order to seal possible loopholes in tax collection.
This comes after the national treasury announced to amend the Capital market act, Income tax act, VAT, and excise duty Act through the finance bill 2021 to help the state meet its budget proposal.
Taxpayers should note the following:
- All schemes that had been previously issued with Income Tax Exemption Certificates will be required to apply for the iTax generated certificates
- Schemes that have had a change in their particulars (e.g. change of name) that have been approved are reminded to update their details in the iTax system prior to making their application for registration.
A guide to the application process is available on the KRA website.
Everything you need to know about Fringe benefits tax
Fringe benefits tax
A tax an employer pays to employees in addition to their salary or wages.
Fringe benefits are an important part of business and can be a useful way to attract employees. If you are going to offer fringe benefits to your staff, make sure that you understand your taxation obligation, find out how FBT could affect your business and how to register for it
These benefits include:
Fringe benefits required by law such as:
- pension plans
- Medical leave
- company-paid life, health Insurance
- Worker compensation
Fringe benefits not required by law
- Commuter benefits
- Meal plans
- Employee discounts
- Paid time off
- Education reduction
Fringe benefits may be required by law, granted unilaterally by employers, or obtained through collective bargaining. Employers’ payments for fringe benefits are included in employee-compensation costs and therefore are not usually liable to corporate income tax.
If your business provides Fringe benefits to employees, you need to do the following:
- Register for FBT
- calculate how much FBT you have to pay
- Keep all records relating to the benefits you provide including how you calculated the FBT you have to pay.
- Lodge a return
- Include reportable fringe benefits on the employee’s payment statement.
Recently KRA stated, that the market interest rate is 7% and this rate shall be applicable for the months of January, February, and March 2022.
KRA Evaluates strategies to boost tax compliance
The Kenya revenue authority is evaluating its tax strategies as it aims at improving tax compliance and customer satisfaction.
During the Africa Annual, Customer Experience Conference at Sarova white sands hotel, the KRA Commissioner for Corporate Support Services David Kinuu said that the review is largely informed by an acknowledgment that customer inclusion is crucial in driving service delivery.
Kinuu stated that KRA has aligned its service delivery according to the 2017/2022 Public Service Transformation Framework, noting that quality service delivery is assured by establishing a performance and accountability culture within an organization.
“Basically, this is our outreach strategy to our taxpayers to tell them what we do at KRA, how we reach out to our customers, the processes, the platforms the enablement that we are doing for our customers to be able to do their civic duty of paying their taxes,” he said.
“The authority is also putting in place a robust service governance framework including instituting a comprehensive complaints management framework, there are also other projects which have improved services to taxpayers including reforms ranging from automation of key services and engaging other stakeholders in customer satisfaction,” added Kinuu.
KRA has introduced a system that enables members of the public to inform the authority of any violation of taxes. This is a move by KRA to promote integrity in the organization.
The commissioner confirmed that the authority has provided a platform to report tax evaders. Grace Wandera who is the deputy commissioner in charge of marketing and communication has advised customers to reach out to the authority and learn more about the service chatter.
“We continue to engage in all sectors to make sure all the citizens are aware. You can walk to all our service centers in the country and you will be helped by our team,” added Wandera.
Persons with disabilities were also encouraged to participate in the sensitization to understand provisions for persons with disabilities.
Additional resources
Voluntary Tax Disclosure Programme(VTDP)
Tax compliance certificate simplified process
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