Have you ever heard of KRA agency notices and wondered just what they were and what this meant for you legally? You are not alone – many people often get caught by surprise by such notices, not knowing what they entail and why they are getting them. We explain what KRA agency notices are in this guide to help you make the most informed decisions upon receiving such alerts.
What are KRA Agency Notices?
In very simple terms KRA agency notices are notices that KRA (Kenya Revenue Authority) may make and place with financial institutions and or any creditor owing money/debt to the taxpayer, indicating that the said amounts held in the financial institutions or with the debtors for the taxpayer not to be released to the tax payer but the same to be paid to KRA in recovery of a tax debt. A taxpayer may therefore find himself in such a scenario.
Depicting KRA Agency Notices
KRA agency notices often find people unawares. You wake up in the morning hail and hearty and then everything suddenly changes. This is what happened to Mr. Serious. He had risen up early to go and deal with one of his best deals in his business. He had succeeded the previous day to belt a big win in a transaction he had pursued for a considerable time.
He was whistling as he headed to his bank swinging his cheque book, which was well hidden in a brown envelop. He headed directly to the bank manager ready to draw a cheque for the deposit on the business deal upon ascertainment of the available funds in his account. He was merely taking this as a formality just to be sure but deep down in his heart he “knew that he had the required funds in the account”.
Lo! Scene two. This business was not to be. The bank manager informed him, to his horror, that the funds in his account could not be accessed as KRA had placed Agency Notices on the same. In other words, the account was frozen.
What Do These Notices Mean?
Frozen accounts – that sounds pretty serious, doesn’t it? Well, placing/ lodging KRA agency notices in taxpayers’ accounts is a right of the Revenue Authority. It is one of the enforcement/recovery measures that it can employ in realizing unpaid taxes, e.g., from landlords who do not pay taxes.
It may or may not give notices for the intended freezing of accounts action and this recovery method can result in untold losses to the tax payer. This, legally is only done after the due taxes have been ascertained, the tax payer is aware of the same and has not settled the amount.
However, there are ways of removing the agency notices in issue in a legal manner depending on each taxpayer’s circumstances surrounding the matter.
How to Handle KRA Agency Notices
In the first place, the tax due must be specific, and the taxpayer must be aware of the same. That is, the legal process of ascertaining the same should have been followed, and there should be no dispute pending in a legal forum over the subject matter. However, where there is an appeal pending either in court or the Tax Appeals Tribunal, the taxpayer can obtain orders to stop the issuance of the agency notices until the matter is finally completed.
Again, where the agency notices have been improperly issued, there is a legal process to remove the same through the courts or the Tax Tribunal. There are also numerous ways the tax payer can use to avoid being caught up in such a scenario.
Dealing with KRA Agency Notices?
Don’t get caught unawares like Mr. Serious. If you think you are at risk of getting an agency notice or have already gotten one, be proactive and take legal measures to protect yourself. For more on notices and the legal options available to you, kindly consult us for further information on the subject. You can use the form below.