The following is a highlight of some of the recent developments in tax issues;

Modernisation of tax administration

The local tax regulator, KRA has aggressively sought to modern tax regime with the introduction of iTax where a number of returns such as VAT, Withholding Tax and PAYE should be filed. This replaces the old manual system which was considered inefficient and is blamed for loss of revenue by the government. Corporate and individual tax payers need to have an iTax account through which the returns should be made. We often help our clients in submission of returns through iTax including generation of tax invoices (PRNs). Please in case you need assistance in this area and our dedicated resource team will be happy to help.

Appointment of VAT tax agents

The tax regulator has reintroduced VAT Tax agents after this was banned sometimes back. However, it is important to note one can only withhold VAT after being duly appointed an agent by KRA. Otherwise, the responsibility of submission of VAT rests with the supplier. However, customers should ensure that ETR receipts are attached to invoices by suppliers to avoid being noncompliant with the VAT Act.

Tax disputes to be resolved through arbitration

The government seeks to reduce the outstanding legal cases in relation to tax disputes. Consequently, the regulator has made it optional for tax payers to consider referring their tax disputes to an arbitrator. This will not only assist in closure of tax cases speedily, but also likely to result to amicable solution of the disputes. The cost of having matters solved by arbitration is also low.