How to Evade Tax in Kenya

582

 

There are many ways individuals and organizations evade tax in Kenya. We are going to reveal tricks they use so as to pocket 100 % of the profit from their businesses.

File zero returns

If a company has a KRA PIN, it should pay tax but what happens every year is shocking. Most profitable companies always file zero returns even after registering profits. The good thing about KRA is that they work with the figures you give them; they don’t actually investigate what the company earned before declaring tax.

Declare your company as a foreign subsidiary

There are individuals in Kenya who own companies and declare them as foreign subsidiaries. When a company operating in Kenya is declared as a subsidiary of a parent company located outside the country, that company submits its tax to the parent country-even employees of that company are taxed based on the taxation rates of the parent company.

Avoid having KRA PIN

Without a KRA PIN there is no way the government will know you are not paying tax. What most people do is, register a company and operate without a KRA PIN until the company breaks even, or when they want to apply for a tender.

Hundreds of companies in Kenya operate without a KRA PIN

Operate a charitable organization/foundation

Most politicians and wealthy businessmen operate charitable organizations and foundations so as to evade tax. Though this is legally acceptable, it’s one way some politicians use to steal money and avoid paying tax.

Sell products through social media

There are thousands of individuals in Kenya who make millions per month through social media yet they don’t pay tax. This is due to the fact that it’s hard to determine how much someone makes through the platforms

Don’t register your company

If your company is not registered, it’s hard for KRA to track you. Most Kenyans opt not to register their companies so as to avoid paying tax.

Though these are some of the ways you can avoid tax, you are warned that tax is against the law. It’s good to pay tax so as to help the country develop.

Loading...