Tax Evasion and 2 Reasons For Extra Tax Payments

Post author:TaxKenya
Post category:Blog on Tax
Post last modified:October 19, 2022
Reading time:7 mins read

This post is about Tax Evasion and 2 Reasons For Extra Tax Payments. Many taxpayers pay extra tax payments in the form of fines, penalties, and interest at one time or another. There are various reasons why taxpayers pay additional or extra taxes. The following are some of the reasons for the extra tax payments by taxpayers:

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Extra Tax Payments

Tax Evasion

We will define tax evasion as intentional failure to pay tax when due. Proven tax evasion attracts jail time and extra taxes. The additional taxes will be in the form of tax fines, tax penalties, and tax interest.

Tax Avoidance

We will define as failure to pay the tax due by exploiting loopholes in the tax laws. Sometimes tax avoidance may be interpreted as tax evasion by the tax authority.

In such cases, appropriate additional tax payments in the form of tax fines, tax penalties, and tax interest will be levied. This will be in addition to any specified tax fines, penalties, and interest for tax avoidance schemes stipulated in the tax laws.

Unintentional Tax Mistakes

This is where taxpayers make genuine mistakes in dealing with tax issues.

The mistakes may result from:

a. Taxpayers do not know what to do about particular tax issues.

b. Taxpayers being misadvised by friends, tax auditors, tax lawyers, and tax consultants.

c. Misinterpretation of the tax laws.

d. Taxpayers lack money to pay assessed tax liabilities.

e. The taxpayer is unsure of the tax treatment for a specific transaction.

f. Electronic tax system failure may result in late filing of tax returns.