Overview of Tax Compliance Certificate (TCC)
A Tax Compliance Certificate (TCC) is an official document issued by the Kenya Revenue Authority (KRA) to confirm that a taxpayer has complied with all tax obligations under Kenyan law. It serves as evidence that the taxpayer has filed all due returns and settled any outstanding taxes. The TCC is not just a compliance document but a crucial requirement in various legal, financial, and business processes. It demonstrates integrity, accountability, and adherence to the tax laws of Kenya.
Legal Framework Governing Tax Compliance
Provisions under the Tax Procedures Act
The Tax Procedures Act, 2015, governs how taxpayers should file returns, pay taxes, and apply for compliance certificates. It outlines the rights and responsibilities of taxpayers and provides penalties for non-compliance.
Role of the Kenya Revenue Authority (KRA)
KRA is mandated to assess, collect, and account for taxes. Through the iTax system, KRA verifies taxpayer records before issuing a TCC, ensuring only compliant taxpayers are awarded.
Eligibility for a Tax Compliance Certificate
Individual Taxpayers; employees, professionals, landlords, and sole proprietors who file and pay taxes such as Income Tax, PAYE (where applicable), and rental income tax.
Businesses and Companies; entities registered with KRA are required to file corporate tax, VAT, PAYE, and withholding tax where applicable.
Employers and PAYE Obligations; employers must deduct and remit PAYE from employees’ salaries monthly. Any default in remittance can block the issuance of a TCC.
Benefits of Having a Tax Compliance Certificate
Participation in Government Tenders and Contracts; TCC is a mandatory requirement for companies and individuals bidding for government jobs and tenders.
Access to Business Licenses and Registrations; certain business licenses and permits can only be granted upon presentation of a valid TCC.
Facilitation of Work Permits and Immigration Processes; foreigners applying for work permits or immigration services in Kenya must provide a valid TCC.
Enhancing Business Reputation and Credibility; clients, investors, and partners trust businesses that demonstrate transparency and compliance with tax obligations.
Pre-Application Requirements
Valid KRA PIN and iTax Account; a taxpayer must be registered with KRA and have an active iTax account.
Up-to-Date Filing of Returns; all returns (Income Tax, VAT, PAYE, Withholding Tax) must be filed even if there was no activity (nil returns).
Clearing Pending Tax Liabilities; any outstanding taxes, penalties, or interests must be cleared before applying for a TCC.
Application Process on iTax
Logging into the iTax Portal; visit https://itax.kra.go.ke and log in with your PIN and password.
Navigating to the Compliance Section; on the iTax dashboard, go to Certificates > Apply for Tax Compliance Certificate.
Submitting a Tax Compliance Certificate Application; complete the application form, confirm details, and submit electronically. No physical documents are needed unless KRA raises queries.
KRA Review and Approval Process
Verification of Filed Returns and Payments, KRA checks whether all returns have been filed and all taxes paid.
Handling Queries or Discrepancies, if there are issues such as pending returns or mismatched payments, KRA will notify you through the iTax system or email.
Issuance of the Certificate, once verified, KRA issues the TCC electronically. It can be downloaded from your iTax account.
Validity and Renewal of the Certificate
Duration of Validity (12 Months); the TCC is valid for 12 months from the date of issuance.
Renewal Procedure on iTax; before expiry, taxpayers should reapply via iTax to renew their compliance certificate.
Consequences of Expired TCC; an expired certificate cannot be used for tenders, contracts, or permits. Continuous compliance ensures seamless renewal.
Common Challenges in Obtaining a TCC
Pending Returns or Payments; failure to file even a single return (including nil returns) can delay the TCC.
Mismatched Records in iTax; differences between declared income and third-party records may lead to queries.
Non-Compliance by Employers (PAYE, VAT, Withholding Tax); employers who fail to remit employee deductions face challenges when applying for a TCC.
Role of Tax Consultants in Securing TCC
Advisory on Compliance Requirements; tax consultants help taxpayers understand all obligations before applying for a TCC.
Assistance in Filing Outstanding Returns; they assist in filing missed or amended returns to clear compliance gaps.
Liaison with KRA on Complex Cases; consultants follow up with KRA in cases where discrepancies or disputes delay certificate issuance.
Conclusion
With a valid TCC, individuals and businesses enjoy smooth business operations, credibility, and access to government and corporate opportunities.
Maintaining compliance with KRA obligations is essential for every taxpayer in Kenya. A valid Tax Compliance Certificate (TCC) not only keeps you on the right side of the law but also opens doors to opportunities such as government tenders, business licenses, and work permits.
With Finfex Solutions by your side, you gain:
- Expert review of your tax profile
- Assistance in clearing outstanding issues
- Smooth application and follow-up with KRA
- Timely renewal reminders
This ensures you remain compliant and focus on growing your business or career while we handle your tax matters professionally.
