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how to apply for a tax compliance certificate in Kenya

How to apply for a tax compliance certificate via itax in kenya – complete guide

Last updated on October 30th, 2023 at 09:52 pm

Here is a step by step guide on how to apply for a tax compliance certificate via itax in Kenya.

A tax compliance certificate is a document issued by KRA as proof of filing and paying all taxes.

It is an important document that is the gateway to various opportunities, including job opportunities.

The Tax Compliance Certificate is only valid for 12 months from the date of issue. 

However, the book can be renewed 7 days before the expiration of the previous one.

Tax compliance certificates issued by KRA

  • Tax compliance certificate for taxpayers who wish to engage with government departments and companies.
  • Tax clearance certificate for employees who are leaving a job or looking for a new job opportunity.
  • Tax compliance certificate for taxpayers who wish to obtain a liquor license.
  • Tax compliance certificate for customs clearance agents and freight forwarders.

How to apply for a tax compliance certificate in kenya

Requests for certificates are made online through the iTax platform and the letter is sent to the applicant’s email address. Before applying for the certificate, the applicant must agree to the filing of the tax return on or before the due date for all existing tax duties, paying the tax on or before the due date and clearing the debt unpaid taxes.

Here’s how to request a verification certificate online.

1. Access the KRA iTax portal.

2. Login using your KRA PIN and password.

3. In the iTax Dashboard, select Certificates and click “Request a Tax Compliance Certificate“.

4. Give reasons for making the request. Personal data is automatically filled in, so all you have to do is fill in the reason for your request.

  1. Click submit.
  2. You will receive a notification or message that your application has been successfully installed.

7. KRA will provide you with a reference number which you can use to track your request.

  1. The request will be reviewed after a few days and a document sent to your email address.
  2. Download the certificate in PDF format to your email and print it.

importance of tax compliance certificate

1. Eligibility for Government Contracts and Tenders:

Government contracts and tenders often involve significant financial transactions. To ensure transparency and fairness, government agencies require that bidders and contractors hold a valid Tax Compliance Certificate. This helps in selecting tax-compliant entities, which are more likely to meet their financial obligations and contribute to government revenue.(See how to apply for government tenders in Kenya)

2. Business Registration and Licensing:

When registering a new business or renewing an existing business license in Kenya, a Tax Compliance Certificate is frequently required. This requirement ensures that businesses operating in the country are in good standing with tax authorities and are fulfilling their tax obligations. (See how to register a business)

3. Access to Financial Services:

Banks and financial institutions use the Tax Compliance Certificate as a risk assessment tool. It demonstrates a borrower’s or business’s financial responsibility and tax compliance. Access to loans, credit facilities, or other financial services is often contingent on the possession of a valid TCC. (See the best banks for business loans)

4. Employment and Job Opportunities:

Many employers in Kenya request that job applicants provide a Tax Compliance Certificate during the hiring process. This requirement is an indicator of an individual’s financial integrity and tax compliance, enhancing their employability.

5. Import and Export Activities:

For businesses involved in import and export activities, customs authorities may require a Tax Compliance Certificate to clear goods at the port. This ensures that importers and exporters are meeting their tax obligations and contributing to government revenue.

6. Participation in Public and Private Sector Activities:

Public and private sector organizations often require partners and collaborators to demonstrate tax compliance through a Tax Compliance Certificate. This practice promotes transparency and reduces financial risk in joint ventures and partnerships.

7. License Renewals and Regulatory Compliance:

Various regulatory bodies, professional associations, and industry regulators may require a Tax Compliance Certificate as part of their renewal and compliance processes. It serves as a way to confirm that regulated entities are in good financial standing and are fulfilling their tax obligations.

8. General Reputation and Credibility:

Holding a Tax Compliance Certificate can positively impact an individual’s or business’s reputation and credibility. It signifies a commitment to financial responsibility and adherence to tax regulations, which can be attractive to partners, customers, and stakeholders.

9. Access to Government Services:

Some government services, permits, or approvals may be contingent on the presentation of a valid Tax Compliance Certificate. This requirement helps government agencies ensure that those seeking services are responsible taxpayers.

10. Legal Requirement:

Above all, compliance with tax regulations is a legal requirement in Kenya. Failing to meet tax obligations can result in penalties, legal consequences, and disruptions to business operations or personal finances. A Tax Compliance Certificate confirms adherence to these obligations and protects individuals and businesses from legal issues.

faqs about tax compliance certificate in kenya

1. What is a Tax Compliance Certificate (TCC)?

Answer: A Tax Compliance Certificate, commonly known as a TCC, is an official document issued by the Kenya Revenue Authority (KRA). This certificate serves as proof that an individual or business is in compliance with tax regulations in Kenya and has fulfilled their tax obligations.

2. Why is a Tax Compliance Certificate important?

Answer: A Tax Compliance Certificate is of paramount importance because it is a prerequisite for various transactions and opportunities in Kenya. It is required for eligibility in government contracts, business registration and licensing, job applications, financial services, and more. Possessing a TCC signifies that you are financially responsible and tax-compliant.

3. How can I apply for a Tax Compliance Certificate?

Answer: To apply for a Tax Compliance Certificate, you can use the KRA’s online platform known as iTax. Log in to your iTax account, navigate to the “Certificates” section, and follow the prompts to apply for the TCC. Ensure that you meet the eligibility criteria and that your tax record is clean and up to date.

4. Who is eligible for a Tax Compliance Certificate?

Answer: Individuals and businesses that have met their tax obligations, filed their tax returns, and do not have any outstanding tax arrears or disputes with the KRA are eligible for a Tax Compliance Certificate.

5. What documents are required to apply for a Tax Compliance Certificate?

Answer: The specific documents required may vary, but generally, you’ll need to provide your KRA PIN, financial statements, tax returns, and any other supporting documentation requested by the KRA. Be prepared to submit documentation that verifies your financial history and tax compliance.

6. How long does it take to receive a Tax Compliance Certificate?

Answer: The processing time for a Tax Compliance Certificate application varies. It can take several working days to a few weeks, depending on the complexity of your financial history and the volume of applications being processed by the KRA.

7. Is there a fee to apply for a Tax Compliance Certificate?

Answer: As of my last knowledge update in January 2022, there was no fee to apply for a Tax Compliance Certificate. However, it is crucial to verify the most up-to-date information on the KRA website or by contacting the KRA directly, as policies may change over time.

8. Can I obtain a Tax Compliance Certificate if I have outstanding tax arrears?

Answer: Generally, individuals or businesses with outstanding tax arrears are not eligible for a Tax Compliance Certificate. It is essential to settle any outstanding tax liabilities with the KRA before applying for a TCC.

9. How long is a Tax Compliance Certificate valid?

Answer: A Tax Compliance Certificate is typically valid for one year from the date of issue. To maintain eligibility for various transactions and opportunities, you will need to renew it annually.

10. Can I check the status of my Tax Compliance Certificate application?

Answer: Yes, you can check the status of your TCC application by logging into your iTax account and reviewing the progress. The iTax portal provides updates on the status of your application, so you can track its progress.

11. What happens if my Tax Compliance Certificate application is rejected?

Answer: If your TCC application is rejected, the KRA will provide reasons for the rejection. You will need to address the issues, such as settling outstanding tax arrears or providing missing documentation, and then reapply for the certificate. The KRA’s feedback will guide you in resolving the issues that led to the rejection.

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