Demystifying Tax

Tax can be daunting but it doesn’t have to be.

Understanding which taxes apply to you and how to submit them can be daunting, but it doesn’t have to be.

Here are some common tax categories in Kenya

NSSF

The National Social Security Fund is a payroll related statutory tax which is required by the Kenyan government for all employers. Find out more about NSSF here: https://www.nssf.or.ke/

Deadline:

9th of the subsequent month

Penalty

Penalty for not paying after registration: 5% of the total contributions for each month or part of the month that is remitted late

NHIF

The National Health Insurance Fund is a payroll related statutory tax which is required by the Kenyan government for all employers. By subscribing to NHIF, the employees have insurance coverage access to a number of public and private hospitals. Find out more about NHIF here: https://www.nhif.or.ke/

Deadline:

9th of the subsequent month

Penalty

Penalty for not paying after registration: 50% of the total contributions for each month or part of the month that is remitted late.

PAYE

Pay as You Earn is a payroll related statutory tax which is required by the Kenyan government for all employers. PAYE follows a graduated payment bracket system and is payable on the iTax system. Find out more about PAYE here: https://www.kra.go.ke/individual/calculate-tax/calculating-tax/paye

Deadline:

9th of the subsequent month

Penalty

Late filing penalty: 25% of the tax due or KES 10,000, whichever is higher. Late payment penalty: 5% of the tax due and an interest of 1% per month

NITA

The National Industrial Training Authority (NITA) levies a payroll related statutory tax of KES 50 per employee per month. This is paid through the iTax system.

Find out more about NITA here: https://www.nita.go.ke/

Deadline:

10th of the subsequent month.

Penalty

5% of the tax due.

Annual Income Tax

Annual income tax needs to be submitted through the iTax portal 6 months after your year-end. This is usually filed after completing your annual audit.

Find out more about corporate income tax here:
https://www.kra.go.ke/business/companies-partnerships/companies-partnerships-pin-taxes/companies-partnerships-file-pay

Deadline:

Deadline: 6 months after your company’s year-end.

Penalty

Penalty for not paying after registration

Withholding Tax

Withholding tax can range from 3 to 25% and applies to various goods/services provided by residents and non-residents. Withholding tax counts as a credit to your annual income tax liability.

Find out more about withholding tax here: https://www.kra.go.ke/individual//filing-paying/types-of-taxes/individual-withholding-tax

Deadline:

20th of the subsequent month.

Penalty

Penalty for not paying after registration: 5% of the tax due.

VAT

A Value Added Tax of 16% in Kenya only applies to companies with a revenue of KES 5 million or over in a 12-month period. VAT in Kenya applies to various goods and services.

Learn more about VAT here: https://kra.go.ke/images/publications/VAT-E-brochure-Final.pdf

Deadline:

20th of the subsequent month.

Penalty

Late filing penalty: 5% of the tax due or KES 10,000, whichever is higher.
Late payment penalty: 5% of the tax due and an interest of 1% per month

The above list applies only to Kenyan companies. If you are based outside Kenya, get in touch and we’ll introduce you to our tax partners in your country.

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