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Consequences of Registering and Not Filing VAT Returns

id : 63   cat : Value Added Tax   
What would you do if you were employed in an organisation where they have voluntary registered for VAT but have never filed the returns for over 3years.

The company has made losses for the three years.
Asked by : DavidM
 DOQ : 2016-08-22 19:00:00


VAT : Returns NOT filed.

First, failure to file VAT returns on time attracts a penalty of 10k per month. From 2016 this penalty is 20k.

Second, the losses are Income Tax Losses and hence have no bearing to VAT. What to do? The VAT penalties are already running at over 400k.

Second output tax if any may not have been accounted for.

Thirdly, INPUT tax may not be claimable since the maximum 12 months window allowed to make claim VAT on expenditure may not be available any more.

I suspect PAYE, WHT may also have issues. THIS DOES NOT LOOK GOOD. What was the rational for voluntary registration?
Answered by : Admin
 DOA : 2016-08-22
I think as we tackle the be income tax act ICPAK should strive to relieve them of the service if registering new companies by somehow finding a way to mandate them to pass through an accountant for any company registration
   Phoebe Wakhungu    Phoebe Wakhungu  2016-08-23 06:15:00
very true. Lawyers have really put many people in a mess. Worst of it all they can even file returns without having to be agents and yet accountants need registration with kra first!
   Vincent Ongera    Vincent Ongera  2016-08-23 05:55:00

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