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Post Clearance Audit Assignment
Post Clearance Audit Assignment
Post Clearance Audit Assignment
Group Members
Contents
Introduction.......................................................................................................................................................2
Follow up activities...........................................................................................................................................3
Reference...........................................................................................................................................................5
Introduction
After the auditors issue the final report on the audit they carried out on client’s declaration of
duty, the follow up step is carried out. This is the process of recovery of additional taxes which the
auditors realised the client had not paid after the audit. Since the purpose of post clearance audit is to
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assess compliance of clients to customs requirements and policies any loophole found in terms of
Follow up activities
The auditor issue a demand note or assessment to the tax payer so that the client can pay for
additional taxes resulting from the post clearance audit .The demand note is addressed to the tax
payer indicating the time frame within which to pay the taxes .The additional taxes could be as a
result of the client billing being short levied , having evaded payment of taxes willingly , wrong
The legal frame work for the follow up task on recovery of revenue is on the section 135 of
the EACCMA 2004, which states that revenue should be demanded from the tax payer within 30
days from the date of the service of the demand note. Section 135 (I) states where any duty has been
short levied or erroneously refunded then the tax payer who has paid the short levied or to whom the
refund was erroneously been made shall on demand by the proper officer, pay the amount short
levied or repay the amount erroneously refunded as the case may be, and any such amount may be
recovered as if it were duty to which the goods in relation to which the amount was short levied or
Demand Note
Where a demand is made for any amount pursuant to subsection (I) , the amount shall be
deemed to be due from the person liable to pay it on the date on which the demand note is served
upon him or her and if payment is not made within thirty days of such service or such further period
as the commissioner may allow , a further duty of a sum equal to five percent of the amount
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demanded shall be due and payable by the tax payer by way of a penalty and a subsequent penalty of
The proper officer shall not make any demand after five years from the date of the short levy
or erroneous refund as the cost may be unless the short levy or erroneous refund had been caused by
fraud on the Part of the person who should have paid the amount short levied or to whom the refund
The proper officer should maintain a proper record of the debt in the respective department
in an aged debt analysis. This will facilitate follow up effectively .he should also take note of all the
commitment letters issued to the tax payer by the Kenya revenue authority concerning post clearance
debt recoveries . He should continue making payment follow up within the time frame of thirty days
stipulated by law.
In situations where the tax payer defaults payment with the time frame, recovery measures
should be used after expiry of this period as stipulated in sections 130 and 131 of EACCMA 2004.
Sections 130 states that recovery of duty by distress for any goods for which duty is payable by legal
proceeds brought by the partner state. Goods having duty due and any other goods imported
afterwards shall be subject for such debt and may be detained by the partner state until duty is paid.
If the duty is not paid within two months after the goods have been detained they may be sold to
meet the duty due. In situations where duty payable or penalty is not paid after one month from due
date, the commissioner may authorize distress to be levied upon goods, , material for manufacturing
or plant of a factory , premises , vehicles or other property , animals which are in possession of the
owner , agent or any other person acting on his behalf (EACCMA, 2004)
.
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The commissioner may also require the person who is an owner of land or buildings in a
partner state and fails to pay any duty due , to apply to registrar of lands for the land or buildings to
be the subject of security for the duty due as specified in the notice .This is as stated in section 131
of EACCMA 2004.When the payment is done of the whole amount secured , the commissioner by
notice in writing to the registrar of lands , cancels the direction and the records the cancellation
If there are any debt write offs that the tax payer deserves, the proper officer or auditor
should make submissions to the commissioner following the right procedure and channel. This is
Conclusion
The recovery of revenue after audit is done in the proper and efficient way as directed by
laws and regulations in EACCMA 2004.Every tax due should be accounted for and collected from
tax payer through correct means and eve through distress in cases where tax payer defaults. All these
measures and actions are taken by customs administrations to collect revenue which is critical for
Reference
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Community, E. A. (2004). East Africa Customs Management Act . Retrieved from East Africa
Customs Management Act : https://www.eac.int/documents/category/eac-customs-
management-act
Post Clearance Audit Manual . (2019). Retrieved from East Africa Community :
https://www.eac.int/65-sector/customs/471-709-403-customs-post-clearance-audit-manual
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