When you receive a demand notice from the Kenya Revenue Authority (KRA), it is important to take prompt action to address the situation. Here are the steps you can follow:
1. Review the Notice: Carefully read and understand the contents of the demand notice. It will specify the nature of the tax liability, the amount owed, and the period for which the tax is due. Ensure that you have accurate information about the tax assessment and the reasons provided by the KRA.
2. Verify the Accuracy: Verify the accuracy of the demand notice by comparing it with your tax records and supporting documents. Look for any discrepancies or errors that may have led to an incorrect tax assessment. If you believe there are errors, gather the necessary evidence to support your position.
3. Seek Professional Assistance: Consider engaging a tax lawyer or tax consultant who specializes in tax dispute resolution. They can provide expert advice, review your tax records, and guide you through the process. They will also represent your interests in dealing with the KRA.
4. Respond within the Timeline: The demand notice will specify a timeframe within which you must respond. Ensure that you adhere to the given timeline. Failing to respond within the deadline may lead to further penalties or legal consequences.
5. Prepare a Response: Prepare a formal response to the demand notice. Clearly outline your objections or reasons for disputing the tax assessment. Include any supporting documents, such as financial records, invoices, or receipts, that can substantiate your claims. It is essential to provide a well-documented and reasoned response to strengthen your case.
6. Engage in Communication: Maintain open and respectful communication with the KRA. Respond promptly to any additional information or queries they may require. Cooperating and providing relevant information can facilitate the resolution process.
7. Seek Dispute Resolution: If you are unable to reach a resolution through communication with the KRA, explore alternative dispute resolution mechanisms. This may involve engaging in mediation or arbitration to settle the dispute. A tax lawyer can guide you through the process and represent your interests during the dispute resolution proceedings.
8. Payment or Negotiation: If you agree with the tax assessment, it is advisable to pay the outstanding amount within the specified timeline to avoid further penalties or legal actions. However, if you believe the tax assessment is incorrect, negotiate with the KRA to reach a resolution that is fair and acceptable to both parties.
Remember, addressing a demand notice from the KRA requires careful consideration and professional guidance. By seeking assistance from tax professionals and engaging in proactive communication, you can navigate the process effectively and protect your rights.