Who Is Supposed To Pay Tax In Kenya?

What percentage is PAYE tax in Kenya?

The formula for determining PAYE is based on Kenyan Tax Laws (Understanding Kenyan PAYE calculation)….PAYE Calculator (Updated 2020 tax rates)Monthly Bands of Taxable Income (KES)Tax Rate0 – 24,00010%On the next 16,666.6715%On the next 16,666.6720%Remaining amount over 57,333.3325%2 more rows.

How do you check if you have KRA penalties?

How to check KRA outstanding penaltyVisit the iTax website.Enter your Kenya Revenue Authority PIN into the PIN box and click continue.Enter your PIN.Key in the arithmetic sum of the security stamp and log in.Click on the menu labeled Debts and Enforcement.Then click on Apply for waiver for penalties and interests.More items…•

What is taxable salary Kenya?

How is PAYE calculated?Taxable IncomeTax RateKSh.0 – KSh.12,29810%KES 12,999 – KES 23,88515%KES 23,886 – KES 35,47220%KES 35,473 – KES 47,05925%2 more rows

What is the minimum taxable income in Kenya?

Tax brackets in Kenya The minimum taxable income comes from the lowest earners (KES 12,298 and below) who pay a tax rate of 10% while the highest band ( from KES 47,059 and above) give 30%.

How do I pay tax in Kenya?

Generate a payment slip via iTax and make payment at any of the KRA appointed banks. If the annual tax liability is projected to exceed Kshs. 40,000, then you should pay in installments via iTax. This is called Installment Tax.

What is the VAT rate in Kenya?

16%Value Added Tax (VAT) is a consumer tax charged on the supply of taxable goods or services made in Kenya and on the importation of taxable goods or services into Kenya. The rate for VAT is either 0% or 16%.

How is PAYE calculated?

If you are paid weekly, your Income Tax (IT) is calculated by:applying the standard rate of 20% to the income in your weekly rate band.applying the higher rate of 40% to any income above your weekly rate band.adding the two amounts above together.deducting the amount of your weekly tax credits from this total.

Is bonus taxed in Kenya?

Bonuses, overtime allowance and retirement benefits paid are tax exempt where they are paid to an employee whose salary before the bonus and overtime allowance does not exceed Kshs. 11,180 p.m. (i.e. 134,164 pa). The individual income tax bands have been expanded and the personal relief increased.

How do I pay my PAYE?

Pay employers’ PAYEOverview.Direct Debit.Bank details for online or telephone banking, CHAPS, Bacs.By debit or corporate credit card online.At your bank or building society.By cheque through the post.Check your payment has been received.Tell HMRC no payment is due.

Who pays tax in Kenya?

Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya. Personal Relief of Kshs. 28,800 per annum (Kshs.

How companies are taxed in Kenya?

Tax rates. The current corporate tax rate applicable in Kenya is 30% in the case of resident corporations (i.e. limited liability companies). … 25% rate if 30% of issued share capital is listed – (for five year period). 27% rate if 20% of issued share capital is listed – (for three year period).

How many people pay tax in Kenya?

2.5 million registered taxpayers out of 19 million registered voters translates to 13.2 per cent. This means that less than 15 % of the registered voters in Kenya pay income tax.

Who is exempt from paying tax in Kenya?

Beginning 1st January 2020, any income earned by an individual registered under the ADP, shall be exempt from tax for a period of 3 years provided the qualifying members pay a KShs 10,000 subscription upon registration. This is a Government incentive to bridge the gap between skills and lack of jobs.

How much is personal tax relief in Kenya?

In Kenya the Income Tax Act (cap 470), Section 30 allows for personal relief at the rate determined under the third schedule, which sets rates of relief. Presently personal relief on taxable income is set at 1,162 shillings per month, which accumulates to 13,942 shillings per year.

How is taxation done?

Income tax: Governments impose income taxes on financial income generated by all entities within their jurisdiction, including individuals and businesses. … This can take the form of a value-added tax (VAT), a goods and services tax (GST), a state or provincial sales tax or an excise tax.

Is tax evasion criminal in Kenya?

Tax evasion is illegal. … In simple terms, tax evasion is a criminal offence in Kenya. The penalty for the offence is either a fine or imprisonment or both. The amount of fine one will have to pay, and the term of imprisonment will depend on the type of offence committed.

How can I avoid paying tax in Kenya?

Dennis Mutunga, a tax consultant explain the simple ways you can minimise the burden.Take a mortgage instead of a loan. … Invest in a tax-free environment. … Take insurance cover. … Contribute to a registered home ownership savings plan. … Get disability relief. … Avoid fines and penalties. … Register your business.

How much tax do Consultants pay in Kenya?

For consultancy services, the taxpayers are required to deduct withholding income tax from the payment. The Withholding income tax rates range from 5 per cent for Kenya tax residents to 20 per cent for specified services by service providers from other countries.

What is turnover tax in Kenya?

What is Turnover Tax (TOT)? Turnover Tax (TOT) is a tax payable by small businesses whose gross sales does not exceed or is not expected to exceed Kshs. 5 million per year. It is payable on monthly basis at the rate of 3% on the gross sales by the 20th day of the following month.