INTRODUCTION

For VAT and income tax processing procedures, the accountant must be up to date and should refer to KRA or relevant tax authorities for the legal rates that are passed through the finance bill every year.

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Failure to pay the vat due tax on due dates attract a penalty of 5% of the unpaid tax.

Note: The same is subject to changes, confirm with the tax authority.

Income tax is a direct tax that is imposed on income derived from business, employment, rent, dividends, interests, pensions among others. Individual income tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.

Let's dive into a case study of a company that faces challenges in income tax and VAT tax compliance due to poor accounts management within the AC account department. We'll also discuss some suggestions on how to address these issues and ensure compliance with tax laws in Kenya.