As the clock ticks to the minute when the taxman plans to deregister a total of 66,269 personal identification numbers (PINs) on Thursday, June 10, the revenue collection agency is offering a procedure where affected owners can use to de-activate their accounts.
The impending deregistration comes after the lapse of the 30-day deadline which the Kenya Revenue Authority (KRA) gave all persons eligible to remit Value Added Taxes (VAT) as the watchdog enforced tax compliance as provided for by the Tax Procedures Act 2015.
According to the guidelines published by KRA on June 8, the perennial non-filers and nil-filers, who range from individual accounts, companies, schools, and self-help groups, have an avenue to have their VAT obligations re-activated.
“The taxpayer shall apply for re-activation to the commissioner through their respective tax service office while clearly stating the grounds or reasons for reactivation of their VAT obligation,” KRA said.
For instance, one might state that they require a VAT obligation to conduct their business and remain competitive in the market or that they would like to take advantage of the ongoing voluntary tax disclosure programme.
Under the programme, which came into force on January 1 this year, a taxpayer confidentially discloses tax liabilities that were previously undisclosed to the revenue agency for the purpose of being granted relief of penalties and interest of the tax disclosed. This scheme is set to come to a close on December 31, 2023.
“Perennial nil filers seeking re-activation must satisfactorily demonstrate to the commissioner their need for the VAT obligation since they have been filing nil VAT returns,”Kenya Revenue Authority
Further, KRA said suppliers whose customers wish to claim input taxes related to certain transactions but have been unable to do by the de-activation of the supplier’s VAT obligation can also lodge a PIN re-activation request.
To process the PIN re-activation request, however, interested taxpayers will be required to furnish KRA with information detailing the date they started trading and charging VAT, besides any other relevant documentation in line with the law for purposes of ascertaining their tax liability.
“Perennial nil filers seeking re-activation must satisfactorily demonstrate to the commissioner their need for the VAT obligation since they have been filing nil VAT returns,” said KRA.
Once re-activated, the applicants will be required to update their VAT returns or where applicable amend previously filed nil returns to capture their correct tax position.
The taxpayers will also be required to make full payments for the outstanding VAT liability or enter into a payment plan with the taxman while regularizing their tax obligations according to the law going forward.