An audit notice from the Kenya Revenue Authority does not have to mean a crisis. Most of the stress — and much of the cost — comes from scrambling for information under time pressure. Businesses that prepare in advance tend to resolve audits faster and with better outcomes.
1. Know what you have filed
Start by assembling a complete set of the returns filed for the period under review: corporate income tax, VAT, PAYE and withholding tax, together with payment confirmations. Gaps or late filings are easier to explain when you have identified them yourself.
2. Reconcile returns to your books
Auditors routinely compare what was declared to the tax authority with what appears in your financial statements and ledgers. Prepare reconciliations for:
- Turnover declared for VAT against revenue in the financial statements
- Payroll costs against PAYE returns
- Payments to suppliers and non-residents against withholding tax remitted
- Taxable profit in the return against accounting profit
3. Organise supporting documents
Have contracts, invoices, import documents, payroll records and board minutes for significant transactions easy to retrieve. Where you have related-party transactions, make sure your transfer pricing documentation is current.
4. Respond in a structured way
When the notice arrives, note every deadline, confirm the scope of the review and agree how information will be shared. Respond completely and consistently — partial or contradictory answers usually lead to further questions.
5. Get the right support early
An experienced advisor can help you anticipate the issues likely to be raised, prepare clear technical submissions and, if an assessment is issued, advise on the objection process and timelines.
This article is general information and is not tax advice. Talk to us about your specific circumstances.