1. Correspondences with TRA
For taxpayers who have closed their offices and working from home, there is a need to ensure that a dedicated person regularly follows up with the postal office to check whether there are any correspondences from TRA. These can be on audit findings; tax decisions e.g. assessments, demand notes etc. Failure to respond timely may lead into significant tax exposures as paper documents serving rules by the Commissioner under section 33 of the Tax Administration Act, 2015 will apply when documents are posted rather than hand delivered. Under the rules, a document is considered to have been received by the taxpayer when posted to an address within the United Republic, ten days after posting.
2. Returns Filing
As most taxpayers accounting period ends 31 December, the final tax return due date is 30th June. While it is important to ensure that the audit process is fast-tracked, there is a possibility that the close of offices may hinder timely conclusion of audit so as to have certified financial statements. Taxpayers who would be unable to meet the deadline can use section 39 of the Tax Administration Act, 2015 to apply for extension of up to 30 days to file tax returns. However, application for extension must be made within fifteen days before the due date for filing the returns.
3. Tax Payments
For entities which have been significantly affected by COVID -19 (Coronavirus) Pandemic thus unable to pay their taxes timely they can use section 55 of the Tax Administration Act, 2015 to apply for extension of time for payment of taxes or spread the payments to manage cashflow challenges. However, for the application to be accepted by TRA it must be supported by evidences of cashflow challenges.
As Government activities are still ongoing including those of TRA, there is a possibility of an audit to be undertaken for your entity. While it is important to ensure fully cooperation with tax officers, if there are circumstances which can hinder your entity’s ability to effectively participate in the audit process due to COVID -19 (Coronavirus) Pandemic, an extension can be applied using regulation 14 of the Tax Administration Act, 2015. When findings have been issued and a taxpayer has genuine reasons hindering the ability to respond timely, regulation 21 of the Tax Administration (General) Regulations, 2016 allows for application of extension of time to respond to TRA audit findings.
Assessments may be issued by TRA during the COVID -19 (Coronavirus) Pandemic. These can be jeopardy assessments, adjusted assessments etc. If a taxpayer is aggrieved by assessments issued, an objection can be made. Section 51 of the Tax Administration Act, 2015 allows for application to file notice of objection out of time.
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