KRA extends rule on agency banking

By John Oyuke

Taxpayers have two more months during which payments to Kenya Revenue Authority (KRA) will be restricted to designated agent banks.

The order comes despite efforts by a section of taxpayers that they continue making payments through the various outlets to enhance effectiveness of tax collection.

KRA has extended the period during which payment of taxes would have been restricted to appointed agent banks to address concerns raised by several taxpayers.

It had earlier issued a directive that all payment of taxes be done only through designated agent banks, which was to become effective from November 1.

Several appeals

However, in extending the directive, the taxman said it had taken the action following several appeals.

“Following numerous appeals on the matter, we have extended the effective date of the said notice to January 21, 2013,” KRA said in a public notice. During this extended period, the authority said, all tax payments through non-agent banks should be directed to the authority’s Accounts at the Central Bank through Real Time Gross Settlement systems.

It insists that payments on its account of E-slips should be made only through KRA appointed agent banks — Kenya Commercial Bank (KCB), National Bank of Kenya (NBK), Cooperative Bank of Kenya and Equity Bank.

“All payments for Customs Services Department duties should be made either at the National Bank or Cooperative Bank as usual,” explained the taxman.

KRA, however, says it was considering appointing additional agent banks and that the existing list would be updated accordingly. This, it said, would cover taxes collected from employees, employers, businesses, corporates and others.

KRA receives the tax revenues from its CBK Account, the Times Tower cash offices or agent banks.

Methods used by the tax collection agency are divided into five categories —

Pay-as-you-earn tax (Paye) that is payments made by employees, withholding tax on incomes like dividends, professional fees, and interest income.