Have you ever had an erroneous tax penalty or interest imposed on you due to non-compliance?

Well, here’s the good news. We now have a module for reversal of such penalties and interest without subjecting you through the waiver process!

There are various circumstances that may result in erroneous penalties and interest. Some of these include but are not limited to wrong obligations assigned to taxpayers at the time of PIN registration (e.g. students having VAT and PAYE obligations), late payment penalties for returns filed in iTax on time but whose payments were remitted outside iTax e.g. either directly to KRA accounts at CBK, or via RTGS, and many more. This is specific to remittances made on time and penalty and interest accrued for taxpayers under dormancy.

How does one apply for a reversal?

The taxpayer is required to submit a formal application at their Tax Service Office (TSO). The application should state why they consider the penalty and interest erroneous. Every application must be supported with documentary evidence, which will be uploaded on the system by the Debt Office. Key to note is that no penalty or interest will be reversed without the correct supporting documents.

What documents does one require?

The supporting documents will depend on the circumstances that led to imposition of penalty or interest. For example, for students who were assigned wrong obligations at the time of PIN registration, the required documents area sworn affidavit, a certified copy of student ID, certified copy of National ID and certificates and transcripts proving that the taxpayer was a student during the period of registration.

For payments missing on iTax but that were made on time, the taxpayer must provide proof of payment (e.g. SWIFT advice, RTGS or bank receipts). This also applies for payments made on time but remitted outside iTax for returns filed in iTax. Employees who are not in business and should not have other obligations such as VAT or PAYE will be required to present a P9 and letter from the employer confirming that they were employees at the time of registration of the obligation and proof that the income earned was only from employment.

Only cases supported with evidence will qualify for reversal of penalties and interest. For further assistance, taxpayers are requested to contact the Debt Office in their Tax Service Office (TSO).

Click on the link below to learn more on reversal of erroneous penalties and interest https://kra.go.ke/images/publications/Reversal-of-erroneous-penalty--interest---Taxpayers-Guide.pdf

Rhoda Wambui

Tax Education Officer