Doing Business in Kenya - RSM International

e applied towards the costs of levying the distress, keeping and selling thedistrained goods and finally, towards tax. Any amounts remaining shall be paidto the distrainee.• The Commissioner may recover money by issuing an agency notice. He may bynotice require any person:• From whom money is due or accruing or may become due to the taxableperson.• Who holds or may subsequently hold money on account of the taxableperson.• Who holds or may hold money on account of some other person forpayment to the taxable person.• Any person having authority from some other person to pay money to thetaxable person.Where the person does not hold any funds, he is required to inform the Commissionerwithin 7 days of receiving the notice.• If there is likelihood of the person to frustrate collection of the tax, theCommissioner may apply to the High Court to obtain an order prohibitingtransfer, withdrawal or disposal of the funds. Within 30 days of the order, orany extension given by the Court upon application by the Commissioner, theCommissioner is required to issue an assessment, which shall automaticallyremove the order. The taxpayer has 15 days after the service of the order tomake an application challenging the order.• Charge of property and subsequent sell. Where a person liable for tax fails toremit the tax within the prescribed time, the Commissioner may, by notice inwriting, inform the person of his intention to apply to the Registrar of Lands toattach any land and buildings owned by the person. If within 30 days of suchnotice, the tax remains unpaid, the Commissioner may by notice in writing,direct the Registrar of Lands to hold the land and buildings as security. TheCommissioner is now empowered to sell land and buildings to recover tax. Theproceeds from the sale firstly apply towards the selling costs and then recoveryof tax. Any surplus is paid to the taxpayer.• The Commissioner is empowered to recover outstanding tax as a civil debt dueto the Government, where he has reasonable belief that:• taxable supplies were made and no tax was charged; or• tax was charged but not remitted to the Authority; or4.8.12 VAT PenaltiesThe VAT Act provides for various penalties in case of non-compliance. TheCommissioner has discretionary powers under the Act to remit penalties and interestnot exceeding Shs 1.5 million. For amounts in excess of this, an application has to bemade to the Minister, through the Commissioner. Where an application is made forremission, the Commissioner will suspend charging of interest where the taxpayerhas paid the principal tax pending hearing of the application. Where remission is notDOING BUSINESS IN KENYA57