By Sharon Atieno
With the COVID-19 pandemic, striking hard on the economy, some business owners are having a hard time coping with various taxes required by the government in order to keep their businesses afloat.
Speaking during a meeting held by the Strathmore University on Tax Policy and the COVID-19 Pandemic Impact on Business, Caxtone Ngeywo, Deputy Commisioner and Head of Policy and Tax Advisory Division, Kenya Revenue Authority (KRA) said that there is need to do much sensitization on how taxes are applied.
He noted that many business owners do not understand rules of taxation with some thinking that changing the platform for example, by going online changes the rules.
Similarly, Geoffrey Injeni, consultant in accounting and finance, Strathmore Business School said despite people being aware about tax and filing of returns, there is still little awareness on tax matters.
With some business owners calling for a halt to taxes during the pandemic, he urged all business owners to learn essentials about tax matters, such as understanding for instance why the government has to tax, which kind of tax to pay, tax records to keep, filing returns, when to pay tax, solving tax disputes and advanced tax matters which include carrying out transactions that expose you less to tax amongst others.
With COVID-19 coming into the picture, the government during a presidential address released new guidelines on taxes in the country, in order to cushion businesses and individuals from hard economic times.
Some of these include: reduction of turn over tax (TOT) rate from the current 3% to 1% for all micro, small and medium enterprises (MSMEs), reduction of income tax rate (pay-as you-earn) from 30% to 25% and reduction of resident corporate income tax from 30% to 25%.