Section 32

Tax as a debt due to the State 

(1) A tax payable by a person under a tax law shall be a debt due to the Government and shall be payable to the Commissioner.

(2) A taxpayer who is required to pay a tax electronically under a tax law or section 75 of this Act shall pay the tax electronically unless he or she is authorized in writing by the Commissioner to use another method of payment.

32A: Mutual administrative assistance in the recovery or collection tax claims.  (Finance Act 2023 wef 1st-July-2023 s54) 

(1) The Commissioner may recover or collect a tax claim pursuant to an international tax agreement contemplated in section 6A (3). 

(2) The recovery of the tax claim under subsection (1), shall be in response to a request by the competent authority of a party to the international tax agreement. 

(3) The request under subsection (2) shall be in respect of a tax claim which forms the subject of the international tax agreement permitting its enforcement in the requesting party and, unless otherwise agreed between the parties, which is not contested: Provided that where the tax claim is against a person who is not a resident of the requesting state, this section shall only apply, unless otherwise agreed between the parties to the international tax agreement, where the claim may no longer be contested. 

(4) The Commissioner, in respect of a request under subsection (2)— 

• (a) may apply for an order under section 43(3); and 
• (b) shall issue to the person who is alleged to be liable to pay the tax a notice requiring that person to state, within the period specified in the notice, whether that person admits liability for the amount or a lesser amount. 

(5) The request under subsection (2) shall— 

• (a) be in the prescribed form; 
• (b) be accompanied by a tax claim issued by the requesting party in the form provided for by the relevant law of that requesting party; 
• (c) indicate the amount of the tax due; 
• (d) indicate whether liability for the amount is contested under the laws of the requesting party; 
• (e) indicate, where liability for the amount is contested, whether the requesting party believes that the purpose of the dispute is to delay or frustrate the collection of the amount alleged to be due; and
• (f) indicate whether there is a risk of the person who is alleged to be liable to pay the tax due, dissipating or concealing assets. 

(6) Where the person who is alleged to be liable to pay the tax due admits liability, the Commissioner may issue a notice requiring that person to pay the amount for which the person has admitted liability, on a date specified in the notice.

(7) Where the person who is alleged to be liable to pay the tax due contests liability, the Commissioner shall, after consulting the requesting party, determine whether— 

• (a) the liability for the amount due is not disputed in terms of the relevant laws of the requesting state; 
• (b) despite the liability for the tax due being contested, the purpose of the dispute is to delay or frustrate the collection of the tax due; or 
• (c) there is a risk of the person who is alleged to be liable to pay the tax due, dissipating or concealing assets, 

and the Commissioner may then issue a notice requiring that person to pay the tax due or amount specified in the notice, on a date specified in the notice.

(8) If the person fails to comply with the notice under subsection (6), the Commissioner may commence proceedings for the recovery of the tax claim. 

(9) The steps taken to assist the requesting party shall not affect the right of the person who is alleged to be liable to pay the tax due to have the liability for the tax determined in accordance with the Laws of Kenya. 

(10) Where the Commissioner recovers or collects the tax due to the requesting party, the Commissioner shall deposit the amount into a dedicated account in the Central Bank of Kenya after which the amount shall be remitted to an account specified by the requesting party. 

    

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