Navigating the KRA KYC Update: A Comprehensive Guide for Taxpayers

Introduction

The Kenya Revenue Authority (KRA) has introduced a new requirement for taxpayers known as the "Know Your Customer" (KYC) update. This update aims to enhance tax compliance and reduce the risk of fraud and tax evasion. As a taxpayer, it is essential to understand the KYC update and take the necessary steps to comply.

Understanding the KRA KYC Update

The KRA KYC update is a process that requires taxpayers to provide certain information and documentation to the KRA to verify their identity and tax status. This information includes:

• Personal information: Name, address, email address, phone number, and identification number (ID/Passport)
• Business information: Name, registration number, and physical address (for business entities)
• Financial information: Bank account details, income sources, and assets
• Tax information: Tax identification number (PIN), tax returns filed, and any outstanding tax obligations

Why is the KRA KYC Update Important?

The KRA KYC update is important for several reasons:

• Compliance with the law: Failure to comply with the KYC update can result in penalties or even prosecution.
• Preventing fraud and tax evasion: The KYC update helps the KRA identify and prevent fraudulent activities and tax evasion.
• Improving tax administration: The KYC update provides the KRA with accurate and up-to-date information on taxpayers, which helps improve tax administration and revenue collection.

How to Complete the KRA KYC Update

Taxpayers can complete the KYC update through the iTax platform:

1. Log in to iTax: Access the iTax portal at https://itax.kra.go.ke using your PIN and password.
2. Navigate to the KYC page: From the iTax dashboard, click on "My Account" and then select "KYC Update."
3. Provide the required information: Fill out the KYC update form with the necessary personal, business, financial, and tax information.
4. Upload supporting documents: Scan and upload clear copies of the supporting documents, such as your ID/Passport, business registration certificate, and bank statements.
5. Submit the update: Once you have filled out the form and uploaded the supporting documents, click on "Submit Update."

Timeline for KRA KYC Update

The deadline for submitting the KRA KYC update was 31st May 2023. However, the KRA has extended the deadline indefinitely to allow more taxpayers to comply.

Stories to Learn From: Humorous Examples of KYC Gone Wrong

1. The Case of the Missing Taxpayer: One taxpayer forgot to update his KYC information and was flagged by the KRA. When the KRA reached out to him, he was shocked to discover that he had been declared "deceased" for tax purposes!
2. The Business Owner with a Triple Identity: A business owner provided three different addresses and phone numbers for his KYC update, causing confusion and delays. It turned out that he was trying to keep his business activities separate, but forgot that the KRA could cross-check his information.
3. The Taxpayer Who Paid Too Much: A taxpayer accidentally submitted his income under the wrong tax band and ended up paying more taxes than he needed to. The KYC update allowed the KRA to identify this error and process a tax refund.

Lessons from the Stories:

• Accuracy is crucial: Ensure that you provide accurate and up-to-date information.
• Transparency is key: Avoid submitting false or misleading information, as it can lead to penalties.
• The KYC update benefits taxpayers: The update helps the KRA identify errors and provides opportunities for corrections and refunds.

Effective Strategies for KRA KYC Compliance

• Plan ahead: Start gathering the necessary information and documents well before the deadline.
• Be organized: Keep a record of the information and documents you have submitted.
• Seek professional help if needed: If you encounter difficulties with the update, consider consulting with a tax advisor or accountant.
• Stay informed: Monitor KRA announcements and updates to ensure you remain compliant.

Step-by-Step Approach to KRA KYC Update

Step 1: Gather information and documents

Collect the necessary personal, business, financial, and tax information, as well as supporting documents such as ID/Passport, business registration certificate, and bank statements.

Step 2: Access iTax

Log in to the iTax portal at https://itax.kra.go.ke using your PIN and password.

Step 3: Navigate to KYC page

From the iTax dashboard, click on "My Account" and then select "KYC Update."

Step 4: Fill out the form

Provide the required information in the KYC update form.

Step 5: Upload documents

Scan and upload clear copies of the supporting documents.

Step 6: Submit the update

Once you have filled out the form and uploaded the supporting documents, click on "Submit Update."

Step 7: Monitor status

You will receive a notification confirming that your KYC update has been submitted. Monitor the iTax portal for updates on the status of your request.

FAQs on KRA KYC Update

1. What is the deadline for the KRA KYC update?

The deadline was initially set for 31st May 2023 but has been extended indefinitely.

2. What is the penalty for not completing the KYC update?

Failure to comply with the KYC update can result in penalties or even prosecution.

3. Can I complete the KYC update on behalf of someone else?

Yes, you can complete the KYC update on behalf of another person if you have their consent and authorization.

4. What happens if the KRA rejects my KYC update?

The KRA may reject your KYC update if the information provided is incomplete, inaccurate, or unsupported by the required documents. In such cases, you will need to provide the necessary corrections or additional information.

5. How can I track the status of my KYC update?

You can monitor the status of your KYC update through the iTax portal.

6. What if I have lost my KYC documents?

In case you have lost your KYC documents, you can request duplicate copies from the relevant authorities.

Useful Tables

Table 1: KRA KYC Update: Key Information

Table 2: KRA KYC Update: Time Frame

Table 3: KRA KYC Update: Supporting Documents