Tax in Kenya

 

Tax in Kenya  – Latest News on the Kenya Tax System

New VAT Tax Act on its way

The Kenya KRA are planning to post a new draft VAT Bill on the Kenya Revenue Authority (KRA) website – followed by open stakeholder workshops in August to review further.

Withholding Tax on Management Fees up from 5% to 10%

Withholding Tax on management, professional and training fees to residents has been increased from 5% to 10%

Employee Tax Returns – Kenya Taxes

Employees are no longer required to file a Self Assessment Income Taxation Return (tax return forms) every June, provided that they do not have any other non-payroll (PAYE) income. This concession was introduced because of online tax returns.

Currency

Tax records for the KRA should be in Kenyan Shillings only

Language

Tax records for the KRA should be either English or Kiswahili

Medical Benefits

Medical Insurance or medical services used by an employee are not taxable or subject to PAYE.

PIN No (Personal Identification Numbers)

The KRA has the power to register and issue Pin No’s to any taxable person who fails to register.

Real Estate Investment Trusts (REIT’s)

An RHIT that is registered with the KRA can have its income exempted from Corporation tax, (but not Withholding Tax)

The income earned by an investor into an REIT and shares sales proceeds will also be exempted from income tax in Kenya.

One Excise Band for Beer and Cigarettes

The KRA has introduced one excise band for beers and cigarettes.

ETR Compliance Teams

Every area now has KRA ETR teams that are making surprise visits on business to ensure that they are ETR compliant.

Current Tax Rates in Kenya

Tax                                                                  Statutory Tax Rate

Corporation Tax                                              30.0%

Value Added Tax (VAT)                               16.0%

Social Security

Stamp Duty on Contracts

 

 

Tax Information Exchange Agreements (TIEA)

The Kenya KRA intends to counter tax evasion in Kenya with new TIEA’s with powers for the KRA to interview persons abroad and attend overseas tax investigations. This will assist the KRA in reducing cross border income tax losses.

 

 

Business and Personal Tax Rates in Kenya

Tax                                                                  Statutory Tax Rate

Corporation Tax                                              30.0%

Value Added Tax (VAT)                               16.0%

Social Security (NSFF)                                   5.0% (Employer + Employee Max 400 Kes)

Hospital (NHIF)                                             2.0% – 5% (Min 150 Kes Max 2,000 Kes)

PAYE (above 38, 892 Kes per month)           30.0%

Personal Relief                                                1,162 Kes