KRA to deactivate PINs not in iTax system to boost compliance

Taxpayers who are yet to register on the iTax platform risk having their personal identification numbers (PIN) deactivated by the taxman.

The move by the Kenya Revenue Authority (KRA) is seen as a drastic response to the millions of taxpayers that do not file tax returns and are not adequately captured on the tax system.

In a statement, KRA says taxpayers who have not filed any tax return for the last three months will be considered as not trading and their PINs deactivated.

“As of July 2017, KRA has noted that there are taxpayers who have not migrated their PINs into iTax while other taxpayers who are already on iTax are either not filing or those in active businesses are filing nil or no returns at all,” KRA said in a notice to the public.

“In this regard, all PINs falling under these categories will be rendered inactive in the iTax platform,” KRA stressed.

KRA said the deactivation would be enforced on August 31.

Earlier this year, KRA increased the fine for those not filing returns from Sh1,000 to Sh20,000 in an effort of getting more people to file returns.

By the end of the tax filing period in June, some 2.4 million taxpayers were yet to comply.

The move to deactivate PINs is expected to compel non-compliant taxpayers to file their returns as blocked PINs cannot transact any business until they are activated.

KRA has been carrying out campaigns to boost tax compliance.

The increased filling got a boost from linking the government payment system to the online tax register or iTax, nabbing tax cheats who make millions of shillings from trading with the state.

Under the Tax Procedures Act 2015, failure to file returns within the deadline is an offence which attracts a Sh10,000 fine or 25 percent of salaried workers’ tax bill, Sh5,000 in case of small and medium sized enterprises which are subject to turnover tax and Sh20,000 or five percent of tax liability on other business incomes.