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Taxation

The evolution of regulatory framework revolving around taxation has become complex majorly due to an increase in cross-border business models.

Due to Kenya’s constantly evolving income tax rules, tax compliance can be a very difficult task. The finance minister often proposes fiscal and monetary policies to promote economic growth each year during the budget-making process. To raise money, this also entails adjusting taxes and tax rates. Our team of trained tax experts is always available to assist you in choosing the right tax obligations for your company. To reduce business risks associated with unforeseen tax bills, we’ll also work with you to file proper tax returns on a monthly or annual basis. Our team will make suggestions regarding the proper tax treatment for any expenditure. This will cover the handling of withholding tax, PAYE, and other things, without being exhaustive.

Principal taxes in Kenya:

  • Corporation Tax: Companies and their branches are subject to this type of income tax in Kenya. The tax rate for resident businesses is 30%, while the rate for non-resident businesses and branches is 37.5%. Instalments are used to pay corporate tax.
  • PAYE: Pay as you Earn is a mechanism used in Kenya to collect tax from those who are working for a living. Each payday, the employer withholds a set amount of tax from the employee’s salary or compensation, and then they pay the tax to the authority. By doing this, the burden of paying taxes at the end of the year is transferred from the employee to the business
  • Withholding Tax: In Kenya, withholding taxes are withheld at the source from the following types of income: interest, dividends, royalties, management or professional fees, training, commissions, pension, or retirement annuities, rent, and appearance or performance fees for amusing, sporting, or diverting an audience.
  • Value Added Tax (VAT) is a tax on consumer spending that was implemented in Kenya in January 1990 to replace the Sales Tax, which had been in effect since 1973. Consumption of taxable goods and services that are imported or supplied into Kenya is subject to VAT, which is collected at designated locations by registered individuals who then return the money to the KRA.
  • Advance Tax in Kenya: Matatus and other commercial vehicles are subject to advance tax. Any Kenyan advance tax payment becomes a credit that can be applied to the corporation tax liability.
  • Residential Rental Income Tax (MRI): Landlords pay this tax under a unique category of taxes tailored to their requirements. Taxpayers are not permitted to incur any costs or capital expenditures. It doesn’t matter if the taxpayers are private citizens, businesses, or other types of entities. 10% of the monthly rental revenue is the tax rate for this specific category. The rental tax is due on the 20th of the next month and is calculated based on the gross rental income collected each month.

Managing such complexity has become a necessity for the enterprises to maximize value from every important business decision. While we ensure that you maintain compliance, we make sure that we create value for your business, giving you the best tax advice & assistance. Our taxation services include:

  • Tax filing, advise on income tax returns and other tax services for individuals, organizations, and businesses
  • A range of financial matters