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KRA TAX Refunds.
JoeNgugi
#1 Posted : Wednesday, May 29, 2019 1:06:33 PM
Rank: New-farer


Joined: 9/8/2018
Posts: 10
Has anyone here, ever gotten TAX refunds after filing their annual Individual Income Taxes, and what is the process?
Impunity
#2 Posted : Wednesday, May 29, 2019 1:20:09 PM
Rank: Elder


Joined: 3/2/2009
Posts: 26,007
Location: Masada
Never,or either anyone I know of!
It's an impossibility.
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.

mwania
#3 Posted : Wednesday, May 29, 2019 7:31:18 PM
Rank: Member


Joined: 10/29/2007
Posts: 75
It is difficult and extremely risky but not impossible. Are you sure that your books are 100% accurate. Implying not only the figures but procedures? DO you withhold tax on your consultants? DO you issue ETRs if you are VAT registered? Have you been consistent with filing and payment of all taxes? Hire a tax auditor before you embark on this process. KRA will charge you twice the refund requested if they find that you did not deserve it! I mean if you are asking Kshs. 100,000 and they carry out audit and find out that you actually owe them 10,000, they will charge you double of Kshs. 100,000 and then proceed to make a demand of the 10,000 due plus penalties and interests!!!
sparkly
#4 Posted : Thursday, May 30, 2019 12:31:23 AM
Rank: Elder


Joined: 9/23/2009
Posts: 6,927
Location: Enk are Nyirobi
As a tax and legal professional, I got many refunds for my clients. Refunds are as as matter of practice offset against past and future tax liabilities. In other words, if a refund is approved you don't get cash but a credit against tax liabilities. Sparkly +254708733938
Life is short. Live passionately.
Monk
#5 Posted : Thursday, May 30, 2019 6:43:30 AM
Rank: Member


Joined: 7/1/2009
Posts: 85
sparkly wrote:
As a tax and legal professional, I got many refunds for my clients. Refunds are as as matter of practice offset against past and future tax liabilities. In other words, if a refund is approved you don't get cash but a credit against tax liabilities. Sparkly +254708733938


Spot on, you get tax credits for VAT. For Income Tax (sole proprietorship), if your Advance Taxes exceed tax due, iTax rejects your return, forcing you to adjust the accounts to reflect no Income Tax overpayment. If you don't make Advance Taxes (quarterly), iTax penalizes you.

@Sparkly: bold move, coming out in the open (tel contact). People use Mpesa to get your real name.
VituVingiSana
#6 Posted : Friday, May 31, 2019 10:18:53 PM
Rank: Chief


Joined: 1/3/2007
Posts: 15,892
Location: Nairobi
Monk wrote:
sparkly wrote:
As a tax and legal professional, I got many refunds for my clients. Refunds are as as matter of practice offset against past and future tax liabilities. In other words, if a refund is approved you don't get cash but a credit against tax liabilities. Sparkly +254708733938


Spot on, you get tax credits for VAT. For Income Tax (sole proprietorship), if your Advance Taxes exceed tax due, iTax rejects your return, forcing you to adjust the accounts to reflect no Income Tax overpayment. If you don't make Advance Taxes (quarterly), iTax penalizes you.

@Sparkly: bold move, coming out in the open (tel contact). People use Mpesa to get your real name.

I would rather pay a small penalty than willingly pay more in Advance Taxes and eat the loss! Psychological.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
sparkly
#7 Posted : Saturday, June 01, 2019 12:11:43 AM
Rank: Elder


Joined: 9/23/2009
Posts: 6,927
Location: Enk are Nyirobi
VituVingiSana wrote:
Monk wrote:
sparkly wrote:
As a tax and legal professional, I got many refunds for my clients. Refunds are as as matter of practice offset against past and future tax liabilities. In other words, if a refund is approved you don't get cash but a credit against tax liabilities. Sparkly +254708733938


Spot on, you get tax credits for VAT. For Income Tax (sole proprietorship), if your Advance Taxes exceed tax due, iTax rejects your return, forcing you to adjust the accounts to reflect no Income Tax overpayment. If you don't make Advance Taxes (quarterly), iTax penalizes you.

@Sparkly: bold move, coming out in the open (tel contact). People use Mpesa to get your real name.

I would rather pay a small penalty than willingly pay more in Advance Taxes and eat the loss! Psychological.


Tax refund is like money in the bank, you can offset against any of your tax liabilities.

Tax credit is on account basis. You
Can only offset against the relevant tax i.e. VAT, Income Tax, Excise or Customs (Limited)
Life is short. Live passionately.
Monk
#8 Posted : Monday, June 03, 2019 6:49:15 AM
Rank: Member


Joined: 7/1/2009
Posts: 85
VituVingiSana wrote:
Monk wrote:
sparkly wrote:
As a tax and legal professional, I got many refunds for my clients. Refunds are as as matter of practice offset against past and future tax liabilities. In other words, if a refund is approved you don't get cash but a credit against tax liabilities. Sparkly +254708733938


Spot on, you get tax credits for VAT. For Income Tax (sole proprietorship), if your Advance Taxes exceed tax due, iTax rejects your return, forcing you to adjust the accounts to reflect no Income Tax overpayment. If you don't make Advance Taxes (quarterly), iTax penalizes you.

@Sparkly: bold move, coming out in the open (tel contact). People use Mpesa to get your real name.

I would rather pay a small penalty than willingly pay more in Advance Taxes and eat the loss! Psychological.


KRA requires businesses to pay installment tax (in advance) in 4 quarters. Amounts to be paid are based on the previous year's profit. If you are in a business with wildly erratic earnings, that's when you can get into over-payment situations, unless you ignore the law and incur penalties instead. For Limited liability entities, over-payments become Tax credits. For sole proprietorships, you lose. Last refund I got was during Moi's time. After Kibaki came in, that stopped...speaking from personal experience. Incidentally overpayments are sometimes as a result of Tax rebates in Morgage, or Pension/Insurance products you might have.
JoeNgugi
#9 Posted : Monday, June 03, 2019 2:00:15 PM
Rank: New-farer


Joined: 9/8/2018
Posts: 10
Good people, thank you for educating me, still
What is a Tax Relief, and how does it work?
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