Employers seek clarification from KRA amid confusion over tax collection

The Federation of Kenya Employers (FKE) is seeking clarification from the Kenya Revenue Authority (KRA) as companies prepare their payrolls.

In a letter to the taxman, FKE notes that the lack of communication from the KRA on the matter has left their members in limbo and unable to remit their taxes. 

This as KRA's system is yet to be re-configured to comply with the ruling of the Court of Appeal.

“The purpose of this open letter is to ask KRA to urgently clarify to employers and all taxpayers in Kenya how they should pay their taxes given the Court of Appeal judgment," wrote FKE Executive Director Jacqueline Mugo in the letter.

"We also take note that today, the 9th of August 2024, is the last day for remittance of July 2024 taxes, and our members may face penalties if KRA does not immediately address these concerns.”

The Court of Appeal ruled that the Finance Act of 2023 and the revenue-raising measures, such as increased taxes for new salary bands for higher income earners, were unconstitutional, null, and void. 

Further, the requirement for businesses to issue Electronic Tax Invoice Management System (eTIMS) invoices and use them for claiming deductible expenses was also eliminated in the verdict.

The government, through the Solicitor General, appealed the decision, seeking stay orders, which were denied, with the matter now set to be heard at the Supreme Court.