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In the Tax Procedures Act (2015), there are various terms used that relate to the application of tax procedures in Kenya. This post is about interpreting some of those terms.

Controlling member

For the application of the TPA, this term means a member who beneficially holds, directly or indirectly, either alone or with a related person or persons, fifty per cent or more of the rights to dividends resulting from membership interests in the company. This interpretation is according to Section 18(4)(b) of the Tax Procedures Act, 2015.

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Default assessments

These are the assessment that the Commissioner issues based on the information when a taxpayer cannot make tax returns for a tax period. This is according to Section 29 of the TPA. The assessments are sent as soft copies through email or hard copies through post, or Hans delivered to the taxpayer, showing the following details:

1. Tax type(s) covered.
2. The tax period covered.
3. Assessment number.
4. Principal tax amount.
5. Tax penalties.
6. Tax interest.
7. The due date for payment of the tax liability.
8. Tax objection procedures.
9. Tax fines where applicable.

These are not the only details that are contained in a default assessments. Other details may be included.

Document

This term has a broad meaning. The term mean hard copy items inform of books of accounting, records, paper, registers, bank statements, receipts, invoices, payment vouchers, contracts, agreements, tax returns, customs declarations and tax invoice etc. The term also means any electronically or mechanically stored data or information.

Due date

This is the date when tax payment should be made to the Commissioner There are three dates:

1. Date specified in the various tax Acts.
2. Date specified by the Commissioner in a notice to a taxpayer.
3. Date specified by the Commissioner to the public.

Excise duty

This is the duty that is imposed under the Excise Duty Act, 2015 in Kenya. The duty is normally imposed on local supplies.

Income tax

This the tax imposed under the Income Tax Act Cap 470 in Kenya. The tax is imposed on taxable income that is specified in the Act.

International organisations

This term covers various organisations. For purposes of the TPA, international organisations are any of the following :

1. Organisations with international membership.
2. Organisations with an international scope of operation.
3. Organisations with international presence.
4. Organisations with memberships to sovereign powers.
5. Organisations with membership to governments of sovereign powers.

Land registrar

This term has several meanings. It means the Chief land registrar in the country, the County land registrar and any land registrar appointed under Section 12 and 13 of the Land Registration Act, 2012 in Kenya.

Late payment interest

This is the interests that are imposed when a taxpayer does not remit taxes to KRA on time. This late payment interest is covered in Section 38 of the TPA.

Late submission penalty

This term has two meanings covering tax and documents. It is :

1. A penalty that is imposed when a taxpayer does not submit tax returns when due.
2. A penalty imposed when a taxpayer submits no document when required to do so by the Commissioner. This is according to Section 83 of the Tax Procedures Act.

Note: We will cover other terms in the next 4 posts … that is why this post is numbered [2].

For any clarifications, get in touch through the email.

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Disclaimer

This post is for general overview and guidance and does not in any way amount to professional advice. Hence, www.taxkenya.com, its owner or associates do not take any responsibility for results of any action taken on the basis of the information in this post or for any errors or omissions. Kenyan taxpayers must always rely on the most current information from KRA. Tax industry in Kenya is very dynamic.