The government needs money to finance its operations. One of the main ways through which the government gets money is through collection of taxes from people and businesses.
The next question that comes to mind is, How then does the government collect taxes?
A simple scenario we can look at is the Kenyan case. The government established the Kenya Revenue Authority by an Act of Parliament on 1st July 1995. This body was charged with collecting taxes on behalf of the government to help it run it’s operations. It usually accomplishes this by defining various types of taxes that are payable by individuals as well as businesses. These include:
- Income tax
- Value Added Tax (VAT)
If you want to learn more on each of these taxes, you can click on these links income tax, Value Added Tax (VAT)
In this tutorial however, we will look at how you add these tax obligations to your PIN if you are conducting business activities that attract these taxes
First of all, you need to have an active PIN number that is updated in the KRA I-tax system. If you do not have it, see how to register for a new PIN, or how to update PIN on the KRA system whichever applies to your case.
Steps for applying for a tax obligation
1. Login in to your KRA I-tax account using your KRA PIN and password. You should get a screen like the one shown below. For more information on logging in click here
2. Next, go to the registration link and click on Amend PIN details.(see below)
3. This opens up the e-amendment registration. Under applicant type select taxpayer (select agent if you are doing this on behalf of another party. Note that this needs you to be approved as an agent before you can do this)
4. Under mode of amendment, you can either choose online form or upload form. The details to be filled are usually the same. The only difference between the two methods is that for online form, you fill the form online (i.e. via the KRA Itax system), while for the upload form, you download the amendment form, fill it and then upload it to itax.
5. Since the details are the same, we will cover the online method. For the upload form method, see how to upload a KRA form to itax.
6. Once you click on next, you should see the image shown below.
7.Under amendment, click on PIN (as shown below)
8. Next go to section B_Obligation_Details.
9. In this section we have a couple of items as follows:
– Income tax- here we have income tax resident, income tax non-resident,
income tax PAYE(for employers only), and turnover tax
– Value Added Tax- (VAT)
9. Now select the obligation that you want to add from among the obligations (items listed).
10. Next, you need to fill in the registration date of the obligation that you are adding. This is the date from which the obligation will commence.
NB: Use the current date to avoid any penalties from accruing.
11. After filling all the obligations you want to add, click on submit.
12. This will submit the request to KRA after which you receive an acknowledgement and you have to wait for a few days for your request to be approved.
It is worth noting that , when adding/registering for a VAT obligation, you need to indicate your turnover for the previous year as well as turnover for the next three years. See requirements for registering for VAT.
If you want more information on how to amend any other PIN details, see amending PIN details tutorial.
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