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{
    "id": 1508261,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1508261/?format=api",
    "text_counter": 61,
    "type": "speech",
    "speaker_name": "South Mugirango, UDA",
    "speaker_title": "Hon. Silvanus Osoro",
    "speaker": null,
    "content": "Tax. At present, the six-month limit for refund application only applies for VAT. Now that will change under the new proposals of the Tax Procedures Bill. On the integration of the electronic tax system with the data-managing reporting system, Clause 7 of the Bill seeks to amend Section 59A of the principal Act by inserting a new subsection that seeks to authorise KRA to require businesses and financial institutions to integrate electronic data management and reporting system with the electronic tax system for the submission of electronic documents and transaction data as provided for under subsection (1A). It also proposes that businesses required to connect to the electronic tax system will have a set period to do so up to a maximum of one year. We all know we are moving digital and that is what the world is doing. Subsections (1B) and (1C) seek to give one a period to synchronise their systems electronically, at least, one year depending on their business type. They will have one year to integrate such systems and this requirement will only apply to businesses with an annual turnover of more than Ksh5 million. That is the best thing about this whole thing. It is particular on the people whose turnover in business is more than Ksh5 million. Sub-sections 5 and 6 provide that the failure to comply with the integration mandate will be considered an offence with penalties of up to Ksh500,000 per month or a part of a month of continued non-compliance. Additionally, financial institutions that fail to submit electronic documents through the required systems will face similar penalties. The purpose of these penalties is to enhance tax compliance and ensure accuracy and timely submission of data with significant financial penalties for non-compliance. First, the gist of the matter is that you have one year to integrate. Secondly, your business must be one whose turnover is Ksh5 million and above. There is no such provision or such proposal for all the rest. This is really a positive thing as it also cures time in terms of remittance and even returns on due date for submission and payment. Clause 8 of the Bill seeks to amend Section 77 of the Tax Procedures Act to provide that in computing the period for lodging of an objection or appeals, the computation shall not include weekends and public holidays. This proposal will give taxpayers more practical timelines to lodge their objections or appeals. What is it seeking to do? It seeks to amend the penalty for late submission and failure to submit returns by an Export Processing Zone (EPZ) enterprises from Ksh2,000 per day to Ksh20,000 per month. That would be the penalty. The positive in this whole thing for business people is that the computation will not be including weekends and public holidays as currently is. That is a positive and very good thing, so that you have such timeline to lodge your complaints within very practical timelines. Clause 9 seeks to amend Section 83 of the Tax Procedures Act to change the penalty structure for EPZs that fail to submit their required returns under Income Tax Act. That is straightforward. When Hon. Members will be retiring to ventilate and look at this Bill, they will be able to understand. Currently, these enterprises face a penalty of Ksh2,000 for each day they fail to submit their returns. The proposed amendment would instead impose a penalty of Ksh20,000 per month or part of the month of failure if the failure continues. Currently, it is Ksh2,000 per day. Because there could be challenges for late submission and payment, instead of penalising, punishing and even making things harder for one, we now have a month. If it is within a month, one can then remit Ksh20,000. As it is, that makes it very expensive for now, and this amendment will now ease the burden by the taxpayer. What are the requirements of a KRA PIN for registration of employees working remotely outside Kenya for Kenyan employees? This is the final part as we come to the conclusion of this Bill. Clause 10 of the Bill seeks to amend the First Schedule of the Tax Procedures Act to provide that registration of an employee who works remotely outside Kenya for an employer based in Kenya must include the requirement for the employee to have a KRA PIN."
}