Kenya Revenue Authority tax demand faulted

Insurance brokers have questioned Kenya Revenue Authority’s decision to have them pay Sh500 million worth of taxes backdated to 2013.

This is despite the Excise Tax Act being repealed in December last year.

The brokers say they might be forced to close shop if KRA carries out its threat to have them pay the accrued taxes.

KRA’s decision has subsequently led the Association of Insurance Brokers (AIBK) to join forces with the Association of Kenya Insurers (AKI) to lobby for the waiver of the backdated dues.

“During our seminar last year, there was a sense of apprehension in the entire insurance industry regarding implementation of Exercise Tax Act 2013,” AIBK Chairman Nelson Omolo said during a forum to address issues facing insurance brokers.

“Our council in partnership with AKI and with the support of IRA, had already opened multiple discussions and lobbying strategies targeting Treasury and the legislature. Eventually in December that year, the President assented to the bill that repealed the Excise Tax Act. However, almost a year later, we have remained just as apprehensive about our future because of the taxes,” he added.

KRA is adamant that the insurance industry and the brokers in particular, still have to contend with the obligations brought about by backdated taxes, which accrued between the months of July 2013 and December last year.

Abolish

Mr Omolo explained his organisation is currently engaged in discussions with Treasury and tax experts to help in lobbying for the abolishment of the said taxes.

He said they hope the issue will have been resolved by next month to end months of uncertainty for their businesses.

Insurance Regulatory Authority Chief Executive Officer Sammy Makove said brokers are an important pillar in the insurance industry and the regulator will do everything possible to help them out.