The Clock On A KRA Assessment

Under the Tax Procedures Act, a taxpayer who disputes an assessment must lodge a notice of objection within a set period running from the date of the assessment. The period is short, it runs on calendar days, and it starts whether or not the assessment reached the person who needed to see it.

That last point is where the damage usually happens. Assessments arrive in the iTax mailbox of whoever registered the PIN - often a former accountant, a departed finance manager, or an address nobody monitors. The clock runs regardless. By the time the assessment surfaces internally, the window may already have closed, and a taxpayer with a strong technical position is arguing for an extension instead of arguing the merits.

The control is trivial and almost nobody has it: a named person who checks the taxpayer mailbox weekly and logs what arrived. Not monthly, and not the external accountant alone.

An objection is not a letter expressing disagreement. To be valid it must state the grounds of objection, state the amendments required to the assessment, and give the reasons for them. An objection that fails those requirements can be treated as not validly lodged - which, once the window has closed, is the same outcome as not objecting.

Two disciplines follow. First, be specific: identify the assessment, the period, the line item and the figure you say is wrong, and state the figure you say is right. Second, object on every ground you may need. Grounds not raised are difficult to introduce later, and the objection defines the shape of everything that follows it.

The Act places the burden on the taxpayer to show the assessment is excessive. That burden is discharged with documents, and documents are far more persuasive when they were assembled before the dispute than when they were produced during it.

Contemporaneous records - the reconciliation prepared at the time, the board minute recording the decision, the contract as executed - carry weight precisely because they were not created for the argument. A schedule prepared two years later to explain a position may be entirely accurate and still land badly, because it demonstrates that no such analysis existed when the return was filed.

This is the practical case for the monthly controls that feel like overhead. They are also the evidence file for a dispute you do not yet know you have.

The Commissioner has a defined period to make an objection decision, and where that period passes without one, the objection may be treated as allowed. From the objection decision, the route runs to the Tax Appeals Tribunal within a further short window, and onward from there.

Each stage has its own deadline, and each is capable of ending the matter on procedure alone. Before responding to any assessment, put the full sequence of dates on one page and give it an owner. Alternative dispute resolution is available and frequently the sensible route, but entering it does not suspend a deadline you have not diarised.