Business Daily
Date: 25.02.2016
Page 24
Article size: 352 cm2
ColumnCM: 78.22
AVE: 148622.22
Why every nd iv iduali and busi ness
needs a tax expert when f 1 Ing returns
By EVANS ONGWAE »> [email protected]
ore than 90 per cent of the The distinction is clear cut, since tax
country's annual national budget avoidance is an entirely legal activity
and does not entail misleading the tax
funding comes from local taxes agency.
collected by the Kenya Revenue Authority However, care should be taken; for
M
(KRA). However, the KRA offers relief for
various purposes but which most people
may not know.
The KRA collects among others value
added tax, income tax and customs. Revenue
collection has increased, enabling the
government to provide much needed services
like free primary education and health
services. But there is room for improvement in
tax collection to fund more social programmes
and expand the existing ones.
A tax expert can assist individuals
and organisations in finding little known
deductions or relief that they may be unaware
example, a taxpayer who does not return
income or gains because he wrongly
believes that he has successfully avoided
paying tax, as a result, may be guilty of
tax evasion.
Tax evasion consists of attempts to pay
too little tax by deliberately misleading
KRA by suppressing information such
as failing to notify the taxman of the
tax liability, understating income or
gains or limited disclosure. One can also
of.
Individuals and small and medium
enterprises particularly find themselves
challenged in knowing how to compute taxes
owed to government.
Starting a new business is an exciting
time for anyone. However, there are
tax implications that can be difficult to
understand.
A company's tax charge is based on
profit, but there are adjustments when
computing the profit subject to taxation.
The general rule is, clear: the higher the
accounting profit, the higher, all other
things being equal, the amount that will
be paid in tax.
That is where professional tax services
come in. Professionals with navigating the
complex world of business deductions,
expenses, insurance, reporting income,
calculating self­employment tax and the
actual payment.
There is a difference
evasion (which is illegal) and
avoidance (which is legally accepted).
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Business Daily
Date: 25.02.2016
Page 24
Article size: 352 cm2
ColumnCM: 78.22
AVE: 148622.22
mislead KRA by providing deliberately
false information such as deducting
expenses which have not been incurred
or claiming capital allowances on plant
that has not been purchased.
Tax evasion is illegal. Serious cases of
tax evasion, particularly those involving
fraud, will continue to be the subject of
criminal prosecutions which may lead
to fines and/or imprisonment.
Some taxpayers ask their
accountants to prepare and submit
returns, but should know they, not the
employees, remain responsible for the
filings.
The accountants, as professionals,
sometimes have questions on whether
the taxpayer is being honest in
providing information when filing the
How the accountant deals with such
situations is a matter of professional
judgment but in deciding what to
do, they are expected to uphold
the standards of the Institute of
Certified Public Accountants of Kenya
(ICPAK). S/lie must act with due care
and diligence, showing the highest
standards of integrity.
returns.
A company's
tax charge is based
on profit, but there
are adjustments when
computing the profit
subject to taxation.
The general rule is,
clear: the higher the
accounting profit,
the higher, all other
things being equal,
the amount that will
be paid in tax.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya