29/06/2020
CONSEQUENCES OF NOT FILING RETURNS.
_(Especially for the unemployed)_
There has been a bad misconception that tax returns is an exercise for the employed. That's not true.
This is what actually happens:
*ORDER OF EVENTS:*
*1. You fail to file nil returns*
_(Nothing happens)_
🔸You can ignore it for several years despite the reminders sent to your email by KRA.
*2. You seek pensionable employment.*
🔸If you are seeking employment from the county government, you'll be required to provide a *Tax Compliance Certificate (TCC),* among other documents.
To get it you must clear all penalties. You're now clean.
✅If your employer is not the one above, you're safe. Continue ignoring the penalties.
*3. You get employed*
🔹At this time your employer provides you with a P9 form for PAYE Returns.
*4. You open your itax to file returns*
🔸To file returns for the current year, you are prompted to file for the previous years first.
This is *late filing,* which attracts a penalty.
🔸For each year you file nil returns, a defaulter notice with a penalty of Kshs. 2000 is sent to your email.
_(It requires you to pay within 30 days)_
⚠️This is the first and last penalty reminder you get.
*5. 30 Days grace period ends*
🔸Nothing happens on your end. The matter is now in the hands of KRA.
🔸At this time, you can apply for *penalty waiver.*
_(Chances of its approval are extremely minimal)_
Another year comes. You file your returns and relax.
You abide by this until you retire.
*6. You retire from service.*
🔸To be cleared, you're required to clear with KRA among other departments.
😱This is the time you realize that _reggae_ never stopped.🔥
Since the expiry of the 30 days period you were given to pay the penalty, it earns a compound penalty annually.
🔸You pay it first so as to get your retirement benefits.
_(This could have grown to hundreds of thousands)._
*IN SUMMARY:*
File your returns.
👉If you haven't done it this year, you only have today and t
