The problems with KRA iTax System
The end of the 2015/2016 Financial Year is here and before 30th June 2016 every Kenyan with a KRA PIN is required by law to file their income tax returns, doesn’t matter whether they have an income or not. Just to be clear, those without income are required to file in nil returns, failure of which KRA will impose a fine of Shs 10,00 minimum. The penalty clause reads as follows, ” Failure to submit a return on or before the due date or submitting a payment return without paying the tax due – default penalty of Kshs.10, 000 or five percent of the tax due whichever is the higher and additional interest of 2% per month compounded.” One excuse many have had for not filing in their income tax returns are the hurdles they had to go through but this shouldn’t be an excuse anymore as KRA has made the entire process of filing in returns an online process through the iTax System.
Right now, for you to file in your return, all you need to do is to go to the KRA website, login at the iTax portal, and choose whatever return it is you intend to file in. Once you have chosen the Tax return you want to file in, the iTax System will allow you to download appropriate Excel Document in which you will be able to fill in desired information, and that’s where your nightmare will probably start.
Foremost, you probably do not have a laptop or a desktop computer, meaning your gateway to the Internet is a simple non-productive device like a 4, 5 or 6 inches smartphone – or if you are lucky enough you could be having a 7, 8, 9 or a 10 inches tablet. 99% of you access the Internet via the small tiny smartphones or the mini-laptops we call tablets, and these devices are not very friendly when it comes to using them to work with office documents like Excel. In case you are one of the 99% of Kenyan Internet users whose only gateway to the Internet is via the smartphones and tablets, you will need to find a way of filling in the Excel documents – maybe you will have to go to a Cyber Cafe.
Secondly, even when you are lucky to have a laptop or a desktop PC, you may be surprised that some of the laptops and PCs are unable to execute those iTax Excel documents because they contain macros that somehow only favor particular version of Windows (e.g. I was told that my service pack 1 of Windows 7 is not supported). I am not sure whether all versions of Operating systems are supported by the KRA iTax System.
Lastly, even when you are lucky to have a laptop or desktop computer that has all the right systems in place, you’ll realize that filling in the Excel file is not a walk in the park. This is because the Excel file has six worksheet each of which needs data from you. In most cases, the required data is not easy to understand especially to the over 80% Kenyans who are in informal employment, which means you probably will need some Tax education before you can actually fill in the Excel document and submit by uploading the file back to the KRA iTax System.
Other than these obvious problems with the KRA iTax System, there are also computational problems that I had mentioned in the article titled The decision to make KRA iTax System mandatory with immediate effect is premature. In that article I wrote this paragraph, “According to a comment in a Facebook update regarding this subject, the iTax System was described as “not even accurate in calculating income tax”. That after the commenter worked for 4 months in 2014, “the system spread the income for the 4 months to cover the whole year and there was no way of telling it otherwise – thus the tax due was inaccurate”. The commenter further states that “right now, the new excel sheet has an inaccurate way of calculating PAYE” which he explains were impossible to figure out even with the help of 3 accountants. Basically, the formulas in the iTax Excel documents for filing income tax do not take into considerations situations where someone has worked for less than 12 months in a year.”
Apparently, there is one recommended solution that can get rid of all the above three issues, and it is the use of online forms in which Taxpayers can conveniently use to fill in their tax information and submit to KRA. Some of the information required by KRA through the Excel Documents are already provided to them when registering for the KRA PIN, and the only reason we are required to provide them over and again every time we fill in the Excel documents is because those excel files are separate documents that are treated independent of the information KRA has on its Taxpayer registration database. However, when an online form option is chosen, then the information that KRA already has will be displayed to the taxpayer, thus the taxpayers will only be required to provide additional information – one time – and that will be sufficient.
Secondly, since some of the information required from taxpayers are not readily understandable, the use of the forms can enable implementation of a “read more” expandable down box that contain additional explanations on the meaning of each item in question.
The beauty of using online forms in the KRA iTax System will be the ease with each smartphone and tablet users can also file in their returns right from within their phones, even if the phones could be as tiny as 3.5 inches. Already smartphone users are able to fill in information through online forms for example when registering for a new email address or simply when inputting their usernames and passwords in certain websites. Again it is easy to customize a website to be mobile friendly (showing the entire width of a webpage on the screen of the mobile device), but customizing an excel document to be mobile responsive is rather impossible).
Lastly, online forms will ensure that every person, no matter what operating system, computer system (laptop, tablet, smartphone, PC) or office suite in use, will be able to easily and conveniently file in their returns. The forms will not require downloads, fill in then upload every time one needs to file in their returns.
Thinking about the conveniences of using the online forms as opposed to using downloadable Excel Documents, I wonder why KRA did not implement the forms in the KRA iTax System right from the very beginning. No, the macros cannot be the reason as KRA could still have their macros run on their central database, perform whatever calculations they need to perform, then return the results to the taxpayer. I would actually like to understand why KRA opted for the Excel Documents – if you know why kindly let me know through the comments section below.