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The Kenya Revenue Authority (KRA) has formulated new tough regulations in a bid to tame unlicensed tax agents in the country.
The tax agency has published the Tax Procedures (Tax Agents) Regulations 2018 that require all tax agents be members of the Institute of Certified Public Accountants of Kenya (ICPAK) or active advocates of the High Court of Kenya.
In the new rules, a former tax administrator with more than 10 years’ experience is also allowed to work as an agent. Further, all agents must now apply to the KRA for registration and licensing at a fee of Sh20,000.
The agents will also be authorized to submit returns on behalf of their clients as well as represent them in tax correspondence with the KRA. The crackdown on illegal tax agents is part of a wider plan by the government to streamline tax administration.
KRA said there has been an upsurge of the number of illegal agents, who have been helping Kenyans escape their tax obligations. In the new regulations, agents or individuals found to have colluded with Kenyans to evade tax will serve up to two years in jail
“Any person, who operates as a tax agent without being registered, fraudulently procures or attempts to procure registration as a tax agent…commits an offence and shall be liable, on conviction, to a fine not exceeding Sh200,000 or to imprisonment for a term not exceeding two years, or both,” the new regulations say.
Illegal tax agents have mainly been using social media platforms such as Facebook and Twitter to market themselves.