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VAT tax returns
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mukiha
#11 Posted : Monday, December 28, 2009 5:25:19 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Qognito:

As long as you are registered for VAT, you MUST file monthly returns even if you have not made any sale. These are called "NIL RETURNS"

Failure to file a return attracts a minimum Sh10,000 penalty for each month. This penalty attracts a 2.5% interest per month if not paid.

So, you owe KRA at sh240,000 for the 2yrs (24 months) that you have not filed returns. In addition, there will be interest on the penalties.....use MS Excel to work them out.

If your company goes dormant, the procedure to follow is to write to the Commissioner of VAT advising the status. Then you continue filing nil returns until the day you get a written confirmation that you registration has been withdrawn.

Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Qognito
#12 Posted : Monday, December 28, 2009 11:58:08 AM
Rank: New-farer

Joined: 12/23/2009
Posts: 22
Location: Nairobi
@Muganda

Many thanks for the info. And the pointer to the KRA info. I got this:

"...REGISTRATION

* Minimum turnover requirement for Registration is Kshs 3 million per year but Kshs. 5million from 1st Jan 2007.
* Some businesses are however registered irrespective of their turnovers e.g. dealers in motor vehicle spare parts, electronics, timber, jewellery and professional services e.g accountancy, computer services, advertising, clearing & forwarding etc....."
http://www.kra.go.ke/vat/VAToverview.html

Although I cant track it, i would have sworn I did see an exemption clause for computer services as per amendments done sometime. 3 years back maybe.

About the council permit, I wanted to convert one of my rooms as an office, though much work involves visiting clients. Not much office-visitors.
Do or Do Not, there is no Try!
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Qognito
#13 Posted : Monday, December 28, 2009 12:05:21 PM
Rank: New-farer

Joined: 12/23/2009
Posts: 22
Location: Nairobi
@Mukiha.

Thanks for the info. That had been my main worry. But the tax man has not made any move. I registered the company while in campus. Not much to do then. It would really suck if I have a pending obligation of over 240K. I wanted to file the nil returns online in their new online system.

As a matter of concern maybe, do i need those VAT register machines? Even for nil trades?

Too much misinformation on my part. Including stuff to do with shares registry update and all.

Pardon my ignorance... smile
Do or Do Not, there is no Try!
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mukiha
#14 Posted : Tuesday, December 29, 2009 9:12:44 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Qognito:

The important date is NOT when the business was registered (by the registrar of companies - Sheria house); it is the date when it was registered for VAT at KRA.

You must file all monthly returns from the Month following the date of VAT registration. And YES you must get an ETR as soon as you register for VAT. Returns without ETR are not acceptable over the counter - KRA is yet to figure out how to deal with ETR reports for online returns.

Please note that there are only two certainties in life: DEATH and TAXES! The sooner you pay up the penalties the better. One day they will catch up with you and you will have to pay....even after you die, they will attach your property.

Note that if you have been VAT registered for 24 months, you now owe over sh330k in penalties and interest!!!
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Qognito
#15 Posted : Wednesday, December 30, 2009 10:32:50 AM
Rank: New-farer

Joined: 12/23/2009
Posts: 22
Location: Nairobi
@Mukiha

That's a relief. I registered it for V.A.T just 2 months back. Although it had been issued with the normal P.I.N. The online system makes it better to file the nil returns. I dont own an ETR yet.

330K is a scary figure.

I realise my predicament is not unique. I just wonder how many people out there with dormant companies are sitting on potential debt.

I would rather KRA assumed returns to be NIL unless they are filed. Would work well. The penalties would make sense then, since those who have something to declare and havent declared it, would be fined.

The current structure assumes a "information rich" society. Which is not the case. Most kenyans are clueless. Pardon my ranting...smile

I think I'll be filling online returns for the months ahead.


Thanks again for the info.
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mukiha
#16 Posted : Wednesday, December 30, 2009 11:30:41 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Qognito:

Phew!! That was close!

But still, if haven't filed the November return (deadline was 20th December), you have a sh10k penalty to pay!

Ignorance is no defence....otherwise everyone would say "I didn't know" and the judges would let them go free!! In any case, KRA holds taxpayer seminars every month - you must have seen their adverts in the press - where all these issues are explained.

So there is really a lot of information in the public domain for anyone interested....yes, the key word here is "INTERESTED"
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#17 Posted : Wednesday, January 06, 2010 5:21:35 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Qognito;

I just did my online VAT return for December 2009, and the system has been upgraded to capture the details of the ETR machine. So you have to buy one before you can make your online return.

Secondly, see today's Daily Nation (p27) for listing of KRA's tax-payer seminars this month; they have scheduled one every Thursday, starting tomorrow. So don't accuse KRA of not informing the public.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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muganda
#18 Posted : Wednesday, January 06, 2010 5:31:23 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@mukiha Dec 09 return on Jan 06 - there's a lesson for better living.
Question if you will - Once you do your online return, where do you actually go to make the payment and what do you carry with you?
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mukiha
#19 Posted : Wednesday, January 06, 2010 1:41:53 PM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Muganda; Why wait until the 19th of January and do the mad-rush with everyone else? I always do my returns before the 10th of the month.

Once you submit the online return, you print out an e-payment slip (3 copies) and make the payment at Co-Op Bank. As of last Month, this was the only bank that could scan the e-slip and accept the payment.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Qognito
#20 Posted : Wednesday, January 06, 2010 5:26:30 PM
Rank: New-farer

Joined: 12/23/2009
Posts: 22
Location: Nairobi
@Mukiha

I had done the returns for November, luckily at the last day of November. Am yet to do my Nil Return for December. Was about to anyway till the ETR issue came up which really complicates issues if I have to get an one. Out of budget cost for a dry month.

I'll try yo make the meeting tomorrow since I'll be around KRA.

Thanks again for the info.
Do or Do Not, there is no Try!
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