KRA's Vigilance on Income Sources

 


Importance of Proper Record Keeping and Tax Compliance

In recent developments, the Kenya Revenue Authority (KRA) has intensified its efforts to ensure tax compliance among citizens, particularly in the realm of property transactions. It has come to our attention that individuals who have purchased land and other assets in the past five years without declaring their sources of income are now under scrutiny. This is a crucial reminder of the significance of maintaining proper records and adhering to tax regulations.

At RWK & Associates, we understand the importance of transparent financial practices and compliance with tax laws. The recent messages sent out by the taxman serve as a stark reminder that failing to adequately document property transactions can lead to severe consequences. It is imperative for taxpayers to keep thorough records of sales agreements, financial statements during the acquisition of property, and bank statements for the relevant years. Failure to do so may result in additional assessments and penalties imposed by the authorities.

Furthermore, it is evident that the directive from KRA is not solely aimed at individuals who have purchased property but also extends to those engaging in tax evasion through various means. The crackdown targets not only high-value purchases like luxury cars but also individuals who channel their transactions through proxies, often seen in the realm of tenderpreneurs. This underscores the necessity for utmost transparency and compliance in all financial dealings.

Conclusion 

In light of these developments, RWK & Associates strongly advises all our clients to review their financial records and ensure full compliance with tax regulations. We emphasize the importance of honesty and transparency in all transactions, as maintaining proper documentation is not only a legal requirement but also essential for building trust and credibility with tax authorities. Our team at RWK & Associates is committed to assisting you in this regard, providing guidance on record-keeping best practices and offering tailored solutions to meet your specific needs.


Book a Free consultancy with us here

Visit our website to learn more


Comments

Post a Comment

Popular posts from this blog

Clarification On Taxation Of Meals Provided By Employers

Image
Background:  The Kenya Revenue Authority (KRA) issued a Technical Circular (Ref: 1005/1) in March 2017, outlining guidelines for the taxation of employment income, particularly regarding benefits provided to employees. Among these benefits, the circular stated that meals provided to employees up to a value of Kshs. 48,000 per year per employee were not subject to tax, in accordance with Section 5(4)(f) of the Income Tax Act. Clarification:  Recently, there has been confusion regarding the interpretation and application of this provision. The KRA has clarified that if an employer provides meals exceeding the value of Kshs. 48,000 per annum per employee, the entire value of the meal becomes taxable income for the employee. Essentially, any amount spent on meals beyond the specified limit is now subject to taxation under the Income Tax Act. Implications for Employers: This clarification places the responsibility on employers to ensure compliance with tax regulations regarding emp...
Read more

Understanding Advance Tax: Essential Information for Vehicle Owners.

Image
  Welcome to the latest edition of the RWK & ASSOCIATES CPA(K) Newsletter. In this issue, we focus on Advance Tax , a critical requirement for all commercial and public service vehicle owners. Understanding how this tax operates and how to manage it effectively can save you time and avoid unnecessary complications. Advance Tax is a mandatory prepayment needed before a commercial or public service vehicle can be registered or licensed. The tax amount is determined by the vehicle's type and capacity. For example, vans, pick-ups, trucks, and similar vehicles incur a fee of Kshs. 2,500 per ton of load capacity or kshs 5000 whichever is higher. In contrast, saloons, station wagons, mini-buses, buses, and coaches are charged Kshs. 100 per passenger capacity per month or kshs 5000 annual amount whichever is higher. It is important to note that Advance Tax is not a final tax. Taxpayers must report this payment in their annual income tax returns and settle any additional taxes that ...
Read more

Summary Of The Key Proposed Changes In The Finance Bill 2024

Image
  Income Tax Act: • Introduction of Motor Vehicle Tax at 2.5% of the vehicle value payable upon insurance issuance. • Withholding tax on goods supplied to public entities at 3% for residents, 5% for non-residents. • Taxation of income from digital marketplaces/platforms at 20% for non-residents, 5% for residents. • Introduction of Significant Economic Presence Tax at 30% for non-residents. • Minimum top-up tax for resident entities in multinational groups. • Deductibility of SHIF, post-retirement medical funds, and the affordable housing contributions. • Investment deduction for spectrum license purchase at 10%. • An eco levy for manufacturers and importers will be introduced. • Imported motorcycles beyond a certain price will be taxed at 10% of value instead of a flat rate. • Taxation of interest income from infrastructure bonds for residents. Value-Added Tax Act: • VAT exemptions on bread will be removed. • Removal of VAT exemptions for financial services such as credit and debit...
Read more