Policy Note · The records the law requires, and for how long
Keep the documents behind every figure for five years, in a form you can produce.
Illustration: Precursor
A taxpayer must keep the records that support its returns, invoices, customs entries, receipts, ledgers, payrolls and the agreements behind each deduction, for the statutory period of five years, and must be able to produce them on request. A deduction is proved by its document, and a cost whose voucher cannot be produced is a cost the authority may disallow.
Beyond the five years the taxpayer need not hold the originals, and credible confirmation from a counterparty can do the work the old records would have done. A claim that the documents exist is not evidence; the documents must be produced.
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Precursor is published by the FinTech Association of Kenya and exercises independent editorial judgement under the Editorial Independence Charter. This article is labelled Precursor Executive Classroom, which marks commercial material. Knowledge on Tax and financial judgement.
Lecture 126 · A director kept meeting the taxman instead of appealing, and four years on the bill had only grown.
𝑻𝒉𝒆 𝑪𝒂𝒔𝒆 𝑹𝒐𝒐𝒎: KRA confirmed a KSh 899,328 income-tax bill against Saphira, and its director spent four years in meetings and relied on his compliance certificates instead of appealing. The tribunal held meetings do not stop the thirty-day clock, a certificate is not proof of payment, and refused leave to appeal out of time; the debt had grown to KSh 1.4 million.
Tax and financial judgement · 4 min read · Paid
Lecture 125 · A rice importer called cleaning and repacking manufacturing, and the court said packaging is not making.
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Tax and financial judgement · 4 min read · Paid
Lecture 124 · A contractor said the money was his clients', had no agreements to show it, and the assessment stood.
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Tax and financial judgement · 4 min read · Paid