Kenya Revenue Authority offices.Photo/dealpoa

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The Kenya Revenue Authority has now issued tough directives to non-compliant companies on tax return filing.

The authority warned that directors of defaulting companies will have their personal identification numbers (PINs) suspended until the firms comply with the law.

In a new bid to avert tax evasion, KRA targets all firms with dormant PIN numbers that are not linked to its online platform, iTax.

 “Corporate entities in active business but with PINs not migrated to iTax and are nil or non-filers, will have their PINs deactivated together with those for the directors,” KRA was quoted by Nation.

The risk of tax evasion has now been spread.

Further, the buck yet stops with employers over inactive PINs of workers. KRA has stated that it is now illegal to pay any employee whose PINs are inactive or not migrated to the iTax platform.

Companies will have hard time in filing workers income tax returns. The authority said it will reject such filings if employee(s) have dormant tax account.

 “Any employer who pays a non-registered employee is committing an illegality as they will not be compliant with PAYE requirements,” Mr John Njiraini, KRA commissioner general said in an interview.

He said the iTax system cannot accept an employer’s pay-as-you-earn (PAYE) return if the payroll contains employees without PINs or with invalid PINs.

According to KRA a dormant or inactive PIN is one which is not active in terms of filing and paying taxes.

The Tax Procedures Act (2015) provides that any director of faulting the tax guidelines will be fined a Sh1 million and a jail term of three years.