Tax Blog

It is time we give a thought to our activities and their contribution to green house gases, taxes come in handy as tool of controlling  economic choices. It is in the best interest of the planet that we carefully consider putting green taxes in our National tax policy, Follow my views in this newspaper article...... Continue reading→

With all transport chaos ranging from traffic jams to spiraling increases in fuel prices and worse of them all, carbon emissions from combustion engines, follow my thoughts on a possible solution https://www.businessdailyafrica.com/bd/opinion-analysis/columnists/electric-buses-offer-a-way-out-of-the-transport-chaos-3870282 Read More Continue reading→

(i) Contribution to retirement schemes An individual’s contribution to a registered pension or provident fund is an allowable deduction against the taxable income. The deductible amount is the actual contribution made by the employee to the scheme(s) but must not exceed 30% of pensionable pay or Sh. 20,000 per month. Take for instance if an employee earns...... Continue reading→

The income of churches is exempt from tax in Kenya. Paragraph 10 of the first schedule of the income tax Act CAP 470 laws of Kenya exempts institutions established for the advancement of religion. Some churches run business ventures like hotels, transport, Radio stations and so on. The income derived from such trading activities is...... Continue reading→

(Ref: Income tax act, sec 12) Installment tax return allows taxpayers to pay tax as the current year of income progresses. The installment tax should be submitted as follows For ordinary taxpayers 1st installment to be submitted by the 20th of the fourth month 2nd  installment to be submitted by the 20th of the Six...... Continue reading→

KRA appoints certain persons to be VAT withholding agents. The agents withhold VAT at 2% of the total amount payable. Thus if you sold an item at Sh. 116 (inclusive of VAT) to withholding agent, he will withhold Sh.2 thus pay Sh. 114. The VAT payable by the supplier remains Sh.16 which has to be...... Continue reading→

Withholding tax is a system of collecting tax whereby a party making payment of certain income is required to withhold tax at a specified rate. The Tax withheld has to be remitted to KRA by 20th Day of the month following the month in which the tax was deducted. Late payment of withholding tax attracts...... Continue reading→

All the persons with KRA personal Identification numbers are required to file returns on annual basis. Of the 6.1 Million registered tax payers in 2021, 5.5 Million filed their returns. That looks impressive however, filing of returns does not necessarily translate to payment of taxes. Some registered taxpayers file nil returns. The Tax filing system...... Continue reading→

It takes two to tango, that’s so true in business. Every transaction has two parties involved. Every seller must have a buyer, every employee must have an employer and every service provider must have a service recipient. Therefore for each transaction there must be an equal and opposite effect. Income to one party must be...... Continue reading→

Value added tax is tax on value added. In the course of furtherance of business a trader is by law required to charge tax on goods or services supplied (output tax) but is allowed to recover the VAT paid (input tax). To illustrate, let’s say a trader acquires item X at Sh.100 and sells it...... Continue reading→