KRA's Legacy Balance Migration: Ensuring Compliance Before the Deadline

Full insight Text

The Kenya Revenue Authority (KRA) through its public notice issued on 31 July 2024 informed taxpayers of its ongoing exercise of migrating legacy balances for Value Added Tax (VAT) and Income Tax onto the iTax system. Taxpayers are therefore advised to review the legacy balances and detailed legacy statement of the migrated balances in the iTax portal.

The review enables a taxpayer to establish whether there are any debit and/or credit balances from the previous tax regime of the legacy system to avoid surprise tax demands. Further, KRA mentioned that the taxpayers have up to 31 December 2024 to provide any additional information and supporting documents that will assist in making adjustments to the legacy balances that KRA did not consider at the time of migrating the legacy balances.

It is therefore imperative for taxpayers to note that any validated credit balances will be available for utilization against future tax liabilities while KRA will proceed to issue demand notices on validated debit balances which will not be objected to or appealed since they will not be considered to be new tax assessments.

Henceforth, where debit balances are validated by KRA, taxpayers have the option to settle the outstanding taxes either in full or enter into an agreeable settlement plan with KRA and pay in instalments in order for the taxpayers to enjoy crucial tax services including obtaining Tax Compliance Certificate.

Kindly contact our tax team to ensure assistance with resolution of legacy tax issues before validation by KRA and maximum compliance with all your tax needs.

The author is Fred Gitonga, Assistant Tax Manager at SKM Africa LLP.