TAX QUIZ & FAQS

1.Why is tax knowledge important?

Taxes are the major financiers of any government’s spending budget. It is as such of utmost importance that all the stakeholders (Government; through all the regulatory bodies, The Revenue Collection Body(KRA) and the Taxpayers) coordinate to ensure an efficient collection and utilization of the pooled public resources.

An understanding of tax, The principles and how it works goes a long way in ensuring compliance in the existent complex Tax environment.

2.Why should I comply with tax laws and regulations?

The business and corporate tax environment is highly dynamic and complex. The complexities and compliance technicalities bring forth new challenges to taxpayers and the revenue body. Keeping up to date with these emerging dynamics, and importantly Complying with the regulations/laws is essential to effectively meeting the associated corporate objectives towards long-term success as well as optimal and balanced revenue mobilization by revenue authorities.

Regulatory compliance is however a core requirement for an organization’s long-term survival and success. The risk and cost of non-compliance could include but not limited to partial or total discontinuation of operations.

3.What is iTax and how do I access it?

iTax is a system that has been developed by the Kenya Revenue Authority (KRA) to replace the current KRA Online system.

To log in to iTax, go to KRA website www.kra.go.ke. On the website you will see the iTax portal banner. Click on it to access the iTax portal or https://itax.kra.go.ke

4.How do I apply for TCC in iTax?

The taxpayer will apply for TCC through their iTax profile. The application will be received online by a KRA officer and processed electronically. Successful applicants will receive email with the TCC attached. Unsuccessful applicants will be notified of the areas of non-compliance.

5.What happens if the submission date for payment of tax falls on a weekend or on a Saturday?

According to the Tax Procedures Act 2015 (TPA 77), if the date of any action in the tax laws falls on a Saturday, Sunday or a public holiday, the due date shall be the previous working date. An exemption however arises if the submission for a tax is done in an electronic form (e,g M-pesa) which can be operated on any day

6.How do I make tax payments?

The taxpayer will first generate a payment registration number (PRN) from their iTax profile. The printed PRN will then be taken to the bank together with the equivalent payment amount through the chosen mode of payment (Cash, Cheque or RTGS).

7.Can I make payments before filling returns

Yes you can. Payments of taxes and filing returns have been delinked. However, any return that does not have a matching payment will automatically attract penalty and interests

8.Can I be granted an extension of time to file returns?

Yes, according to the Tax Procedures Act 2015 (TPA25),

  1. You should write to the commissioner applying for the extension before the due date for the submission of the tax return.
  2. If satisfied that there is reasonable case, the commissioner shall notify you in writing of the extension of time, and
  3. If granted, it shall not alter the original due date as specified in the tax law and late payment interest shall be payable from the original due date

9.How do I treat Credit notes in iTax?

iTax has provided for inclusion of the credit notes in the return. While filling the returns one needs to input a negative figure but quote the invoice relating to the credit note.

10.What are the instances that KRA use of to determine Tax points?

Tax is due and payable when:

  1. The Supply takes place;
  2. An invoice is issued;
  3. Part or full payment for the supply is made;
  4. A certificate of completion is issued( in case of construction industry)

11.How can CapaBuil Help?

From filing returns, to seeking redress against faults made by the Revenue Body against your firm to assisting you achieve ultimate compliance with all the relevant tax laws, you just need to contact us and that is sorted.

We walk the tax journey with and for you.

12.Why choose CapaBuil

We will listen to your story, put on your shoes and look at it from your perspective. The “You” angle will enable us to give commentary advice that is all rounded and guaranteed to work for your case.

CapaBuil goes beyond just theoretical training and uses practical case studies to lead delegates to the value paved path of taking action based on practical lessons learned. We place high premiums not just on the outputs of our products, but the outcomes and impact to your organization!

Tax Quiz (5 Multiple choice questions)

1. Which of the following statements is true about Direct taxes?

  1. It is a tax whose Impact falls on one party and Incidence on another
  2. It is a tax whose Impact and Incidence falls on the same party
  3. It is a tax whose neither Impact nor Incidence falls on the same party
  4. It is a tax whose either Impact or Incidence falls on the same party

 

2. Identify the tax module that is incorrectly matched with its current tax rate

  1. Turnover tax- 3% of turnover
  2. Resident companies - 30% of Profits
  3. Non-resident companies - 35% of Profits
  4. Capital Gains Tax- 5% of net capital gains

3.Time of supply (Tax Point) is the earliest instance at which a tax becomes due and payable. Which of the following instance is not used to determine the Tax Point?

  1. Date of goods delivery or service performance
  2. Date certificate is issued i.e by Architects, surveyors e.t.c
  3. Date a Proforma invoice for the supply is issued
  4. Payment for the supply is received, whole or part

4.Installment tax is paid by both individuals and corporate taxpayers who have tax payable for any year. It is payable on the 20th day of certain months in a year. On which month does it not fall due?

  1. 20th day of the 4th Month
  2. 20th day of the 6th Month
  3. 20th day of the 8th Month
  4. 20th day of the 12th Month

5.With reference to the definition of Tax, which statement is incorrect;

  1. The transfer is levied on a basis of predetermined criteria
  2. Payment of Taxes is in reference to specific benefits received
  3. It is a non-penal payment
  4. It initiates a compulsory transfer of resources from the private to the public sector

(Contact us for the answers of the multiple choice questions if you are interested in any of them or you would like additional tests to gauge your understanding on Tax )