Why you need a Tax Consultant for your Business and Personal Finances

Taxation is the mode by which governments across the world raise revenue from their citizens. Taxes are levied on all individuals and businesses either directly or indirectly. Paying taxes is a civic duty for all citizens. There are various Laws enacted by the government to ensure the legality of tax collection from all. Since taxation is certain and compulsory it is, therefore, paramount that as an individual whether in business or not you have a tax expert or consultant for tax advice. This article explores why it’s very important to have a tax expert not only for your business tax issues but as well for your personal taxes and finances.

A brief overview of Taxation.

 Tax is a compulsory contribution levied on individuals or corporations by a government entity (Ref:  https://www.investopedia.com/terms/t/taxes.asp). The tax could either be a direct tax or an indirect tax.

A direct tax is a tax whose incidence and impact is on an individual and it cannot be transferred to a different person, example of direct tax includes employment income, personal income, corporate tax etc. On the other hand, an Indirect tax is a type of tax whose incidence and impact can fall on a different person. A good example of an indirect tax is Value Added Tax (VAT) which is transferred to the final consumer in a supply chain. 

Taxation of Individuals and Business in Kenya

In Kenya taxation is administered by the Kenya Revenue Authority (KRA). Various laws are the legal basis for the government imposing taxes, the supreme law being the superior one.  Article 209 of the Kenyan Constitution outlines the Power to impose taxes and charges. Other Laws that guide Taxation in Kenya Include:

• The Income Tax Act
• The Tax Procedures Act
• Exercise Duty Act
• Value Added Tax Act
• East African Customs Management Act

The Laws outline how tax is to be imposed on which incomes, how it should be collected, the due dates, and as well dictates the penalties for non-compliance to the tax laws.

List of Various Taxes in Kenya

Regarding the above Laws there are various types of taxes in Kenya including but not limited to:

• Employment Income Tax – PAYE (Pay As You Earn)
• Turnover Tax
• Withholding Tax
• Value Added Tax
• Corporate Tax

Taxation is a wide thematic area that needs a tax expert who has studied taxation discipline in finance, accounting, MBA, and as well with experience to decipher. Most of the tax practitioners are Certified Public Accountants (CPAs) and Lawyers.