This archive report was first published on 14 November 2019.
Tax Obligations for Kenyans ¶
Published on November 14, 2019
As a Kenyan citizen, it is essential to understand your tax obligations, especially if you have a Personal Identification Number (PIN). By law, every individual with a PIN is required to file their tax returns annually.
According to the Kenya Revenue Authority (KRA), individuals who possess a PIN and fail to file their return are culpable to an interest accruing penalty for every year for which the return is not filed.
Who should have a KRA PIN? Any Kenyan citizen or individual/entity within Kenya who is employed, has a business, has rental income, wishes to apply for a Higher Education Loan, or intends to perform any transaction within Kenya. Non-resident Kenyans or non-Kenyan residents within or outside Kenya can also apply for a PIN using the requirements provided in the law.
When are you required to use a KRA PIN? Land transactions, building construction and trade licenses, registration of motor vehicles/business names/companies, and opening a bank account in Kenya are just a few examples of when a KRA PIN is required.
Tax Obligations for Kenyans with a KRA PIN
- Income Tax: Applicable to both residents and non-residents, individual income tax is required for anyone drawing wages from organizations registered in Kenya. Every individual with a KRA PIN is required to file an individual income tax return annually, on or before June 30th of every year.
- Value Added Tax (VAT): Charged on the supply of taxable goods or services made or provided in Kenya and on importation of taxable goods or services into Kenya, payable on or before the 20th of the following month.
- Pay As You Earn (PAYE): Employers are required to register for this obligation, deduct PAYE from their employees' salaries and wages at the prevailing rates, and remit the same to KRA on or before the ninth of the following month.
- Residential Rental Income Tax: Tax payable by resident persons on residential rental income accrued or derived in Kenya, where the rent income is between Kshs.144,000 and Kshs.10 million per annum.
