Is your business audit-proof? At TAC Professional Services, our Tax Health Check service identifies and fixes compliance gaps before KRA finds them. This comprehensive review helps businesses stay ahead of tax obligations, avoid costly penalties, and maintain complete KRA compliance. By proactively assessing your tax health, you can operate with confidence knowing your business is fully prepared for any audit.
Why Every Business Needs a Tax Health Check
Filing tax returns on time is important, but it does not guarantee that you are compliant. Many businesses unknowingly submit inaccurate returns, leaving them exposed to audits and penalties. These errors can arise from incorrect expense claims, incomplete income reporting, or outdated tax knowledge.
A Tax Health Check thoroughly examines your VAT, PAYE, Corporate Tax, Withholding Tax, and other obligations to ensure that every figure reported is correct and supported by documentation. It allows you to operate with confidence, knowing that your compliance status can withstand scrutiny.
Common Compliance Gaps That KRA Targets
One major risk area identified during a Tax Health Check is VAT mismatches, which occur when the VAT you claim as input tax does not align with what your suppliers have reported. This can happen due to missing eTIMS invoices, late submissions, or incorrect PIN details. Such mismatches often result in disallowed claims and unexpected tax liabilities.
Another frequent issue uncovered in a Tax Health Check is PAYE under-declaration. Mistakes in payroll tax calculations, incorrect treatment of benefits, or omission of statutory deductions can lead to underpayment. With KRA’s ability to cross-check your PAYE against NSSF, NHIF, and other statutory records, these errors are easier than ever to detect.
Withholding tax non-compliance is also a common finding in a Tax Health Check, particularly among businesses working with consultants, contractors, and service providers. Failure to deduct or remit withholding tax on time can result in penalties and strained supplier relationships, as vendors require withholding certificates for their own compliance.
How a Tax Health Check Works
At TAC Professional Services, we begin with a comprehensive document review. This includes your tax returns, accounting records, bank statements, and eTIMS reports to identify discrepancies. The aim is to compare what has been reported with the actual transactions in your books.
We then conduct a compliance gap analysis, highlighting where your records fall short of KRA requirements. This may involve identifying unreported income, ineligible deductions, or missed tax obligations.
Finally, we provide clear, actionable recommendations. This can involve amending past returns, improving record-keeping processes, or implementing reconciliation systems to ensure ongoing accuracy. The goal is to prepare your business so it can confidently face any KRA audit.
The Cost of Waiting Until KRA Knocks
Some businesses only address compliance after receiving an audit notice, but by then it is often too late to correct mistakes without incurring costs. KRA can audit up to five years of your records, meaning even old errors can have financial consequences today.
An audit can also disrupt your daily operations, take up valuable management time, and affect your reputation. Clients, suppliers, and investors may see a tax dispute as a sign of poor financial management, making it harder to build trust and secure business opportunities.
The Competitive Advantage of Being Audit-Proof
Staying compliant does more than keep penalties away — it builds credibility. Businesses with accurate records and transparent tax processes are more trusted by lenders, partners, and investors. This trust can lead to easier access to financing, stronger partnerships, and better long-term growth prospects.
By being audit-proof, you free your team from the constant worry of potential tax disputes. Instead, you can focus on growth, expansion, and delivering value to your customers without the distraction of compliance problems.
In today’s tax environment, waiting for KRA to point out your mistakes is a costly gamble. A Tax Health Check ensures that your business remains compliant, reduces the risk of audits, and protects your financial stability.
Conclusion
At TAC Professional Services, we specialise in helping businesses across Kenya identify and close compliance gaps before they become problems. Our team provides a thorough review, expert advice, and practical solutions to keep your business audit-proof.