Taxpayers in Kenya have the right to object to tax assessments issued by the Kenya Revenue Authority (KRA). However, not all objections are accepted. The validity of a tax objection depends on various factors, including compliance with legal requirements and submission of sufficient supporting evidence. In this blog, we explore what makes a tax objection valid or invalid under KRA regulations.
Understanding Tax Objections
A tax objection is a formal challenge made by a taxpayer against a tax assessment, demand notice, or penalty imposed by the KRA. The process is governed by the Tax Procedures Act, 2015, which outlines the legal requirements for filing objections.
What Makes a Tax Objection Valid?
To be considered valid, a tax objection must meet the following criteria:
1. Timely Submission
Objections must be filed within 30 days from the date of the assessment notice. Late objections may be rejected unless the taxpayer provides a valid reason and requests an extension from KRA.
2. Use of the Correct Format
A valid objection must be submitted through the iTax portal or any other approved KRA platform. It should follow the prescribed format, clearly stating the tax assessment being objected to and the grounds for objection.
3. Submission of Supporting Documents
A taxpayer must provide sufficient supporting evidence, such as:
- Financial statements
- Bank statements
- Sales records
- Purchase invoices
- Tax payment receipts
Failure to submit these documents weakens the objection and may lead to rejection.
4. Clear and Justifiable Grounds
A valid objection must outline specific reasons why the taxpayer disputes the assessment. Some acceptable grounds include:
- Incorrect tax computation
- Double taxation
- Incorrect classification of income
- Exempt income taxed in error
5. Payment of Undisputed Tax Amount
If a taxpayer agrees with part of the assessment but disputes another portion, the undisputed amount must be paid before filing an objection. This demonstrates good faith and compliance with tax laws.
What Makes a Tax Objection Invalid?
An objection may be deemed invalid if it fails to meet any of the above criteria. Common reasons for rejection include:
1. Late Submission Without a Valid Reason
If an objection is filed after the 30-day deadline without a compelling reason, KRA may reject it outright.
2. Lack of Supporting Documents
An objection without adequate supporting evidence is likely to be dismissed. Claims must be backed by relevant documents proving the taxpayer’s position.
3. Failure to Specify Grounds of Objection
Vague objections that do not clearly explain why the assessment is incorrect are often rejected. A taxpayer must provide detailed and specific reasons.
4. Non-Payment of Undisputed Tax
If the taxpayer fails to pay the portion of tax they agree with, KRA may reject the objection.
5. Filing Through the Wrong Channel
Objections that are not submitted through the iTax portal or another official KRA-approved method may be disregarded.
What Happens If an Objection Is Rejected?
If KRA rejects a tax objection, the taxpayer has the right to:
- Request a review of the decision within 30 days.
- File an appeal with the Tax Appeals Tribunal (TAT) within 30 days of receiving KRA’s decision.
- Seek further legal redress in the High Court if unsatisfied with the TAT ruling.
Final Thoughts
A successful tax objection requires timeliness, proper documentation, and valid legal grounds. Taxpayers should ensure they adhere to the correct procedure to increase their chances of a favorable outcome. Consulting a tax professional can also help navigate complex tax disputes effectively.
For more information, visit the official KRA website or contact a certified tax consultant.
Need Help Filing a Tax Objection? If you’re facing a tax dispute with KRA, our experts can assist you in preparing a valid objection. Contact us today for professional tax advisory services!
