NAIROBI, KENYA: The Kenya Revenue Authority (KRA) made one of the loudest and most intimidating threats on taxpayers late last month.
The taxman warned that beginning August 31, it will kick-start a spirited onslaught on a number of denizens and business entities aimed at deactivating their Personal Identification Numbers (PINs).
The PINs to be deactivated are those which are yet to be linked to the iTax system.
When the process is finalised later this year, almost five million Kenyans will not have a PIN number to their name.
KRA, in a rather bullish and brawny style, announced that those who will have their PINs deactivated will not be able to receive services such as eCitizen and NSSF.
“KRA has noted that there are taxpayers who have not migrated their PINs into iTax, while others who are already on iTax are either not filing or those in active businesses are filing nil or no returns at all. In this regard, all PINs falling under these categories will be rendered inactive in the iTax platform,” the taxman said in a notice.
“KRA, therefore, notifies the general public that those who have not updated their PINs on iTax should do so by August 31, 2017 and commence filing immediately. Taxpayers who have not filed any tax returns for the last three months will be considered as not trading and their PINs rendered inactive.”
Many Kenyans who have been amazed and aggravated by such unwarranted saber-rattling do not, however, know that they would lose their constitutional rights as citizens if the overzealous taxmangoes ahead with his inscrutable plan.
Sadly, there are many things one cannot do without a PIN.
Transactions that need active PIN certificates include registration of titles, approval of development plans, registration, transfer and licensing of motor vehicles, registration of business names and companies.
On top of this, PINs are needed for underwriting of insurance policies, customs clearing and forwarding, payment of deposits for power connections, supplying goods and services to the State, as well as opening accounts with financial institutions.
One of the questions several Kenyans are asking are: what legal mandate does KRA have to imposingly and arrogantly deactivate PIN numbers that are not linked to the itax system?
Is a KRA PIN issued to citizens as a favour, or is it a right provided in law, in the same way the Department of Registration of Persons issues Identity Cards or Passports?
Tax law expert Philip Muema says KRA is being unnecessarily condescending, adding that there is nowhere in the Tax Procedure Act an individual’s PIN is forcibly required to be linked to iTax.
“It is not mandatory in law for someone to link their PIN to iTax. iTax is a creation of KRA to enable Kenyans be easily tax compliant digitally, and not an entity in law,” argued Mr Muema.
“As for the issue of employers not paying employees whose PINs are not in iTax salaries, that is an empty threat. KRA only penalises employers who pay employees without PINs Sh2,000.”
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Muema argues that KRA has today become belligerent and hell-bent towards threats, bellicose enforcement of its mandate and outright bullying of taxpayers.
“That’s one of the major reasons why many Kenyans have recoiled from it, making the taxman find it difficult to hit its revenue targets.
“You will remember that during the Kibaki regime, KRA was very friendly to taxpayers. That is when it started media sensitisation campaigns such as as, ‘Kulipa Ushuru nikujitegemea,” Muema asserts.
“As a result, tax compliance went up and revenue collection soared. But the present belligerence and threats are putting off many Kenyans.”
Nikhil Hira, a tax expert at financial services firm Deloitte says the other combative talk by KRA to deactivate PINs for individuals who have filled ‘nil’ in their tax returns is ‘total nonsense.’ “There is nowhere in the Tax Procedures Act where the Commissioner is empowered to deactivate PINs for individuals who have filled ‘nil’ in their returns,” Hira says.
“That is totally illegal. If the Commissioner wants, he can go and audit those individuals and ascertain that they have an income before deactivating their PINs.” Hira avers that according to the Tax Procedures Act, if the commissioner cancels your PIN, then he is required by law to issue you with a new one.
Apart from PIN deactivation, the taxman, in May this year, issued another pompous threat.
That is when the commissioner aggressively poured the fury of the Tax Procedures Act number 29 of 2015, by increasing by 20 times the penalties for those who file their returns late.
The culprits are presently charged Sh20,000 for late tax returns.
Both experts concur that with its current warlike and out-of-touch attitude with the common taxpayer, KRA is behaving like the bad old former regime when it functioned as a mere department at the Treasury. “To say the truth, KRA has come far since the days when questionable characters manned its revenue desk at the income tax department,” Muema warns.
“Nowadays, we are seeing public sensitisation campaigns and media forums. But at times, old habits seem very difficult to die and KRA could be slowly drifting back to its yester-years of unprofessionalism.”