The KRA Pin: Importance and emerging legal issues
Why You Need a KRA PIN
The Kenya Revenue Authority Personal Identification Number (sometimes referred to as PIN Number) has now become an integral part of commercial and financial life. It was initially introduced into our local systems at the turn of the millennium to enable the Kenya Revenue Authority (KRA) in its mandate of collecting and receiving all government revenues.
Initially, the PIN was created for administrative purposes to enable KRA create a tax base and otherwise identify the taxpayers.
The Tax Procedures Act
It was not until the enactment of the Tax Procedures Act, Act No. 29 0f 2015 (Tax Procedures Act) that the PIN was grounded in statute at section 11. In the intervening period, the PIN has grown from being merely an identifying number and/or symbol ascribed to an individual or person for tax purposes. The PIN has become a significant document for identification, a verification tool for the access of a wide variety of government services and participation in the financial and economic sphere in our country.
The PIN is now an essential tool in commercial life
As set out in the First Schedule to the Tax Procedures Act, Act No. 29 0f 2015 the PIN Number is now required for:
- registration of titles and stamping of instruments;
- approval of development plans and payment of water deposits;
- registration of motor vehicles, transfer of motor vehicles, and licensing of motor vehicles;
- registration of business names;
- registration of companies;
- underwriting of insurance policies;
- trade licensing;
- importation of goods and customs clearing and forwarding;
- payment of deposits for power connections;
- all contracts for the supply of goods and services to Government Ministries and public bodies;
- opening accounts with financial institutions and investment banks.
In a nutshell, it is the defacto identification number for taxation and all and any financial and commercial services that may have a remote impact on the taxation of an individual. Arguably, sufficient statutory, administration and government policy requirements and statements have been put in place to determine whether and to what extent an individual or entity can take part in our financial and economic life.
What then is a KRA PIN?
So what is this PIN? The PIN is issued under the Tax Procedures Act to a person registered for the purposes of any tax law when they have an accrued tax liability or they reasonably expect to incur a tax liability under the Income Tax Act or Value Added Tax Act or they otherwise expect to manufacture, import and/or supply excisable goods.
In addition to this a person who has not been registered under section 8 of the Tax Procedures Act but who requires a PIN for the purposes of a transaction specified in the First Schedule may apply to the Commissioner for a PIN.
An individual or entity can only hold one PIN. The Tax Procedures Act provides that only one PIN is assignable to a person at any given time. One therefore makes an application for a PIN in the prescribed form and must be accompanied by documents that the Commissioner may require including documents of identity or registration. At the moment these requirements are outlined in the Kenya Revenue Authority iTax website to be:
- The Kenyan national card identification number for a Kenyan Resident or the Alien’s identification card number for a non-Kenyan Resident.
- For non-resident foreigners who can demonstrate their actual or potential tax liability passports may be used.
- Where the applicant is a corporate entity they require to provide the Instrument of Incorporation e.g. the Certificate of Incorporation or Registration as well as their Constitutive Documents e.g. Memorandum & Articles of Association or Constitution & By-laws.
The application is filed online on the iTax portal. Once approved and registered the PIN Number is issued and an email generated copy is emailed to the taxpayer via the email details submitted in the application.
Getting registered for a KRA PIN is as easy as that.