Category Archives: Updates / Announcements

Pay As You Earn (PAYE) is the mandatory tax levied on all employees’ income. In Kenya, the government manages the PAYE tax through the Kenya Revenue Authority (KRA), which collects the statutory contributions from the employer, before salary and wages are paid to the employee.

It is the employer’s statutory duty to deduct PAYE from the pay of his employees.

The normal PAYE year runs from 1st January to 31st December, it is filed and remitted monthly by the employer.

Read more on  Pay As You Earn FAQ

TAX HEAD             TAX PAYMENT DEADLINES

1. Corporation Tax – Installment Taxes
   • 1st Installment By 20th of 4th month in the current year
   • 2nd Installment By 20th of 6th month in the current year
   • 3rd Installment By 20th of 9th month in the current year
   • 4th Installment By 20th of 12th month in the current year
   • Return Tax Balance By end of the 4th month after year end
2. Withholding VAT @6% Remitted on weekly basis by Monday of the following week
3. Pay As You Earn – PAYE By 9th of the following month
4. National Hospital Insurance Fund – NHIF By 9th of the following month
5. National Industrial Training Authority – NITA By 10th of the following month
6. Catering Levy – Tourism Levy By 10th of the following month
7. National Social Security fund – NSSF By 15th of the following month
8. Residential Rental Income Tax By 20th of the following month
9. Withholding Tax from professionals, technical services.. By 20th of the following month
10. Value Added Tax By 20th of the following month
11. Excise Duty. By 20th of the following month
12. Kenya Bureau of Standard – KEBS (Standard Levy) By 20th of the following month
13. Aviation Fees By 20th of the following month

A tax audit is examination, investigation, looking over or evaluating of books and records of accounts for taxation purposes. A tax audit is when the revenue authority decides to examine your tax return a little more closely and verify that your income and deductions are accurate. Tax audits don’t happen all that often. When they do, it’s usually because something about your financial situation caught the attention of the  Revenue Authority.

Tax audits are conducted because there is information available to the tax authority which triggers tax audits. To read more  Tax Trigger

 

The Finance Act 2015 introduced a new Section 6A in the Income Tax Act Cap 470 Laws of Kenya, which provides for a simplified tax regime on taxation of  rental income. ‘The tax to be known as Residential Rental Income Tax shall be payable by any resident person (individual or company) from income which accrued in or derived from Kenya for the use or occupation of residential property’

Read more Rent Income tax

An employee is an individual who was hired by an employer to do a specific job. The employee is hired by the employer after an application and interview process results in his or her selection as an employee.  An employee works part-time, full-time or is temporary in a job assignment. On the other hand a consultant is a person engaged to provide professional advice or services for a fee, but not as an employee of the business that engages him or her.

To learn more on Employees Contract.

 

 

Failure to keep books of accounts & records such as sale invoices, purchase invoices, credit & debit notes, customs entries, audited accounts, ledgers, cash books, bank statements, monthly Z returns, pay-in-slips and a summary of VAT Accounts for a minimum period of five (5) years.
Selective Issuance of Tax Invoices.
Charging VAT for non-registered entities.
VAT registered entity but with no ETR Machine.
Non-Filers (Income Tax, PAYE, VAT.)
Non availability of monthly Payrolls.
Non separation of business transactions from personal.
No regular Bank reconciliations.
Failing to pay Income Tax in instalments.
Failure to file directors returns.
Failure to manage Business Risks i.e. Insurance Covers, WIBA..
Failing to account for Withholding Tax on various payments made to Professionals, Consultants, Training firms, Management Fees, imported services among others.
Selecting wrong tax obligation at the point of TAX registration.