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  • Type: KPMG information, Press release
  • Date: 1/22/2016

My take on the Tax Procedures Act 2015 

In an effort to boost business and widen the tax base, Kenya has in the recent past overhauled most tax and business laws. Examples include the Value Added Tax (VAT) Act 2013, the Excise Duty Act 2015, Insolvency Act 2015, Tax Appeals Tribunal Act 2013, and the Companies Act 2015, among others.
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On 15 December 2015, President Uhuru Kenyatta assented to the Tax Procedures Act (TPA Act) which aims at harmonising the tax administration process as one way of making tax compliance easier. The TPA Act which takes effect upon issue of a notice in the Kenya Gazette brings all the tax procedures in Kenya under one regime, with the exception of minimal specific procedures

provided for under the specific tax legislations.

 

The TPA Act gives the Commissioner power to register taxpayers for various tax obligations without their express application to be registered. Previously, only the VAT Act had provisions allowing the Commissioner to register a person without their application to be so registered.

 

One of the recent concerns globally has been in the area of transfer pricing with many Governments and civil society organisations complaining that multinationals operating in their jurisdictions do not pay taxes commensurate to their level of operations in the countries in question. The TPA Act seeks

to provide the Commissioner with additional powers to investigate pricing arrangements between

related entities where the Commissioner is of the view that the arrangements are designed primarily to avoid tax. The TPA Act provides a punitive penalty amounting to double the tax avoided for those taxpayers who are guilty of involvement in tax avoidance schemes. This move is likely to ignite debate on the differences between tax evasion, which is illegal and tax avoidance which legally takes advantage of loopholes in the tax legislation to reduce or eliminate tax liability...Read more