Check Deadline And Penalties For Filing KRA Tax Returns Late In 2021
Do you know that if you fail to file your KRA Tax Returns on time that you will face a penalty? Before, thinking about the penalty, do you know the deadline for filing KRA Tax Returns? If No, then this informative article is for you. You will be given detailed information about Deadline And Penalties For Filing KRA Tax Returns Late.
The Kenya Revenue Authority (KRA) is charged with oversight and the collection and accounting of taxes on behalf of the Kenyan Government as per Kenyan law. The money collected through the KRA helps the government to achieve stable economic growth.
The iTax portal is an online program used by taxpayers to file their returns before the deadline and monitor their accounts in real-time. Annual returns for businesses with a December year-end are also submitted online via the iTax platform.
The PAYE returns are also filed online via iTax, and if you have no PAYE to declare, you are still required to file a Nil return. Importantly, don’t ignore the itax returns deadline.
Deadline For Filing Tax Returns In Kenya
When are tax returns due? The first phase of the tax return filing season was on 1st January 2021. The deadline for the final stage of the filing period is on 30th June 2021. All individual income tax returns should be filed before that date. To avoid the deadline rush, taxpayers are urged to start filing their returns early.
The deadline for filing the PAYE is on the 9th of every month. Individuals are also required by law to pay withholding tax before the 20th day of the following month. The payment is completed online through iTax or MPesa. If you fail to file your tax returns on time, you will incur hefty fines, and the interest can be substantial in the long run.
Penalties For Delayed Filing
Every registered business in Kenya and adults must honour the deadline for filing KRA returns. Otherwise, they are liable for prosecution by the government, which comes in the form of hefty penalties. The size of fines imposed depends on the tax. But in most cases, the interest that accumulates means you end up paying more money. That is why it’s necessary to file and pay taxes accurately and on time.
Late Payment Fine Of PAYE Tax
What is the penalty for paying PAYE late? If you don’t file PAYE returns within the specified time and day, you will pay a penalty of 25% of the tax owed or Ksh. 10,000. Late payments also incur a 5% fine on the amount due and an additional interest fee of 1% per month on the unpaid amount.
Penalty For Small Business
Small businesses that fail to file Turnover Tax will pay a fine of Ksh. 1,000 per month. Late payment results in a penalty of 5% of the tax due and 1% interest on the amount owed. As a result, as the business owner, if you file your returns but don’t pay the required payment after the deadline, you shall repay taxes owed, along with a penalty and accumulated interest.
Income Tax Penalty
When it comes to individual income tax returns, late filing results in a hefty fine of 5% of the amount of tax due or a penalty of Ksh. 2,000. The late filing for income tax returns for a company or partnership is 5% or a fine of Ksh. 20,000. Moreover, for late payment, the penalty is 5% of the amount owed and an additional 1% interest.
Withholding Tax Penalty
In Kenya, the fine for late filing of withholding tax is 5% of the tax payable or Ksh. 20,000 depending on which figure is higher. The penalty for failure to deduct withholding VAT and Rental Income Tax is 10% of the amount due. Additionally, the fine charged for late payment of withholding tax, be it income tax, VAT, or Rental Income tax is 5% of the tax due.
Late Filing Of MRI Returns
If you are an individual and you fail to file your MRI returns on time, you will pay a fine of 5% of the tax due or Ksh. 2,000. For non-individuals, the penalty is 5% of the unpaid amount or a fine of Ksh.20,000. In case of late payment, a charge of 5% of the tax due and 1% interest per month is imposed.
Excise Duty Tax KRA Penalty
The penalty for paying Excise duty tax after the deadline set by KRA has elapsed is 5% of the tax due, and you also incur 1% interest per month. On the other hand, the fine for passing the stipulated tax deadline in Kenya for filing Excise duty is Ksh. 10,000 or a 5% charge of the amount due depending on which figure is higher.
In some cases, Kenyans don’t take note of when they should pay their tax returns, but failing to meet the KRA tax returns deadline is a costly mistake. Apart from the stiff fines, the mistake will also affect your eligibility for credit facilities. So ensure you file your returns before the 30th June deadline to avoid the implications.
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