Doing your taxes right and on time is key to maintaining compliance. While doing your own taxes is allowed and acceptable by KRA, thousands of Kenyan taxpayers prefer working with a licensed tax agent. Tax agents are professionals with years of experience handling client taxes, including filing returns, registering for KRA PINs, filing objections following tax disputes, and offering customized tax advisory services. If you are on the fence about hiring a tax agent for your business or individual taxes, this post sheds more light on why you need a licensed KRA tax agent for compliance in Kenya.
Who is a KRA Tax Agent?
According to KRA, a tax agent is a professional or company licensed by the Kenya Revenue Authority Commissioner to handle the tax matters of a taxpayer on their behalf. They can prepare taxes on the taxpayer’s behalf and offer professional assistance to individuals, businesses, non-profits, and companies. A tax agent can be:
- A certified public accountant (CPA)
- A tax attorney
- Any enrolled agent who meets KRA’s requirements for a licensed tax agent
Anyone can nominate a licensed tax agent to handle their taxes. If you can’t prepare your own taxes or don’t want to due to complexity, you are entitled to appoint a tax agent to handle them for you. Therefore, it doesn’t matter if you are a salaried employee, a business owner, a sole proprietor, a company director, or a self-employed individual. Every taxpayer can delegate their tax preparation and filing returns, among other tax duties, to a KRA-licensed tax agent.
What Role Does a KRA Tax Agent Play?
So you have decided to work with a KRA tax agent? What can you expect from them as a taxpayer? Here are some of the roles of a KRA-licensed tax agent:
- Preparing and submitting tax returns on behalf of the taxpayer.
- Preparing notices of objections following a tax dispute.
- Represent the taxpayer before the Kenya Revenue Authority on matters relating to tax.
- Advise the taxpayer on matters relating to tax before the KRA commissioner, Tax Appeals Tribunal, or any other authority.
- Handle other tax-related matters on behalf of the taxpayer
As you can see, working with a tax agent is akin to having a dedicated professional guide you through all tax-related matters and handle your taxes so that you can focus on your career, business, or company.
Why You Need a Licensed KRA Tax Agent for Compliance in Kenya
Working with a qualified tax professional offers a myriad of benefits, from peace of mind and saving time to saving on taxes. Here’s why you need a licensed KRA tax agent for compliance in Kenya:
Gives You Peace of Mind
Doing your own taxes can be overwhelming in the constantly changing tax landscape in Kenya. A tax agent keeps up with these changes and regulations because it’s their job. Therefore, they are better informed and prepared to handle all tax matters at any particular time. Working with them lifts the burden of tax preparation from you. Knowing that a professional is handling your taxes also gives you peace of mind.
Helps to Keep Up With Changing Tax Situations
Every now and then, KRA revises tax laws and regulations. Also, tax situations may change for an individual or company, making their tax preparation more complex. If you’re unsure of what’s expected of you by the tax authority, a tax agent can help you understand, prepare, and remit your taxes. This ensures compliance, avoiding unnecessary penalties and interests.
Maximises Your Savings
The best way to save on taxes is to work with a professional tax consultant. They know all the deductions and exemptions you are eligible for and can help you maximise your savings. Most taxpayers focus on the basic deductions when filing their own taxes, often losing money in the process. If you want to get the best deal on your taxes, work with a tax agent.
Saves Time
Filing tax returns and calculating taxes is a cumbersome task. It’s even more time-consuming for monthly taxes such as a Value Added Tax (VAT). Delegating your tax filing to a tax agent saves you time. You can focus on more important things, such as growing your business and increasing your revenue.
Provides Expert Advice on Tax Planning and Management
A tax agent goes beyond streamlining your books and filing your tax returns on time. They are your partner in taxation, offering helpful insights regarding tax planning and management. A tax agent will:
- Help you plan for future tax liabilities.
- Maximise your tax savings.
- Detect fraud and point out something that doesn’t add up in your financial records.
- Develop strategies to help you avoid and minimize penalties and interest.
Help Navigate Tax Disputes
Have you received a demand letter from KRA? Maybe you have received a tax penalty, and you can’t understand why. A tax agent can help you object to KRA’s decision or understand the source of penalties and interest. They can also help you escalate the matter in case a tax dispute arises, including preparing and filing a notice of appeal in the Tax Appeals Tribunal.
Avoids Audits
KRA audits are overwhelming, and every taxpayer dreads them. Filing your own taxes without industry knowledge makes you prone to making mistakes. You can select the wrong obligations, input inaccurate data, among other errors. These errors trigger KRA audits. A tax professional prepares taxes accurately, avoiding costly mistakes that could lead to audits or hefty penalties.
Factors to Consider When Choosing a Tax Agent
There are hundreds of licensed KRA tax agents in Kenya, from tax attorneys to certified accountants. How do you choose a tax agent that meets your tax needs? Consider these factors:
- License: In Kenya, the Kenya Revenue Authority approves tax agents. Make sure the tax professional is registered and licensed by the KRA.
- Expertise and Experience: Choose a tax professional who understands the ropes of the tax industry in Kenya. After all, you expect them to handle your taxes in the best way possible and provide helpful tax advice.
- Access to tax resources: Tax agents can be individuals or partnerships. The latter is likely to have access to modern software and other resources that help with tax preparation and management.
FAQs
What is the difference between a tax agent and an accountant?
A tax agent manages all tax matters of a taxpayer, including books, financial records, tax preparation and filing, and tax disputes. On the other hand, an accountant’s main focus is on handling an individual’s or a business’s books and financial records.
Who is the best tax agent in Kenya?
The best tax agent in Kenya depends on your tax needs and preferences. Gichuri & Partners stands out as one of the best licensed KRA tax agents in Kenya, with industry experience, resources, and a proven track record.
Is it okay to do my own taxes?
Yes, there is nothing wrong with doing your own taxes. However, it’s best to seek help from a tax professional, especially if you’re handling complex taxes or aren’t conversant with the current tax laws and regulations.
Is hiring a tax agent worth it?
Absolutely. Hiring a tax agent offers many benefits, such as saving time, having your taxes prepared and filed on time, peace of mind, and representation when a tax dispute with KRA arises. A tax professional also helps you avoid KRA audits, detect fraud, and maximise tax savings.
Final Words
You need a licensed KRA tax agent for compliance in Kenya. This professional can help you prepare and file your taxes on time and according to current tax laws. It gives you peace of mind knowing your tax matters are being handled by an accountable professional. Additionally, it saves time and helps avoid costly mistakes. If you are looking for a licensed KRA tax agent, look no further. Gichuri & Partners is a licensed and certified KRA tax agent, helping taxpayers of all sizes handle all their tax matters. Contact us today for the best tax agent services in Kenya.
