BUSINESS & FINANCE

Kenyans to pay Sh. 100,000 for false or incomplete data presented to KRA

The penalties for the information breach, which also carry a three-year jail term, will also apply to employers and business partners, says the Finance Bill

Individuals filling tax returns to pay a penalty of  Sh100, 000 for each false or incomplete information presented to the Kenya Revenue Authority (KRA). This comes as the government intensifies the fight against individuals to dodge paying taxes.

The penalties for the information breach, which also carry a three-year jail term, will also apply to employers and business partners, says the Finance Bill that is before Parliament and seeks to review a number of taxation laws.

“A person who makes a false statement or omits any information required to be included in an information return under 6B shall be liable to a penalty of one hundred thousand shillings for each such false statement or omission to imprisonment for a term not exceeding three years,” says the Bill.

The penalties if approved by Parliament will take effect from July 1 and come at a time millions of taxpayers are racing to file their tax returns ahead of the June 30 deadline.

More than 4.4 million taxpayers filed their returns in the year to June 2020 and the KRA has had targeted 5.5 million for the period ending June.

The amendments also propose Sh. 1 million fine for financial institutions, including banks, insurance and investment firms, that the KRA relies on for records on tax compliance.

“A reporting financial institution that fails to file an information return or a ‘nil’ return when required under section 6B shall be liable to pay a penalty of one million shillings for each such failure,” says the Bill.

The proposals come months after the KRA rolled out a voluntary tax disclosure programme where taxpayers with arrears for the past five years are to get full or partial relief on penalties and interest on the undisclosed taxes. The KRA’S onslaught on tax cheats received a major boost last year after the High Court ruled that the taxman had powers to compel taxpayers to provide details of wealth they failed to disclose in their annual tax returns.

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