The Kenya Revenue Authority (KRA) has added a new feature on its online portal, iTax allowing users to directly claim refunds of erroneously paid taxes.
The National Treasury through the Finance Act 2022 introduced provisions for refunds of mistaken payments to KRA for all categories of taxes.
To cater to this, the iTax system has been enhanced by creating a new sub-menu under the ‘refunds’ menu for ‘taxes paid in error’.
“The first phase of this delivery targets taxes whose respective credit has not been reflected in the iTax ledger but the taxpayer has evidence of payments made. The system will allow taxpayers to submit an application for a refund of the tax paid in error for major tax heads (i.e. VAT, income tax, turnover tax, withholding taxes etc.) which will then be subjected to an approval process within the iTax refunds module” said KRA.
This functionality is currently only available on the taxpayer portal and not the back-office profile implying that only a taxpayer can initiate the refund application process.
“Cases with scenarios where the credit is already existent in the iTax ledger are not part of this initial enhancement phase and will be provided for in future iTax releases,” said the taxman.
“As such, all refund processing officers are requested to ensure that the ledger is not credited with the ‘tax paid in error’ prior to processing a claim. Where the credit is present in the ledger, the taxpayer should be guided to await the second phase of this enhancement” it added.
KRA said the iTax system has also been adjusted to allow taxpayers to apply for an off-set of overpaid instalment taxes.
Instalment tax payment
“When a taxpayer files their income tax return and they have excess instalment tax payments, the system will generate an instalment adjustment voucher (IAV). The system will subsequently allow taxpayers to capture the IAV when making their next instalment tax payment and, therefore, be able to offset it against instalment taxes payable for the affected period,” said the taxman.
The overpaid instalment taxes can, however, only be offset against future instalment tax payments.
Additionally, KRA said the upgraded iTax system will enable users to check outstanding liability during refund applications. Where a taxpayer has unpaid taxes they will not be able to lodge a refund until they are cleared by the taxman.