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Demystifying Kenyan taxes
Rank: New-farer Joined: 7/1/2014 Posts: 12
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@Admin allow me to start this thread for general queries on taxes.
Aim is to provide quick references for tax questions some of which could have been asked and answered in other threads.
Experts in the field of taxation are most welcome to contribute.
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Rank: Member Joined: 8/19/2014 Posts: 125
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Do banks submit the money figures coming into you account to KRA?
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Rank: Member Joined: 6/10/2006 Posts: 201 Location: Nairobi
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Banks only submit client information or raid your bank account when there is a tax query or suspicion of tax evasion. Otherwise that information is too voluminous...
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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Paye @30% every month computed annually. Refunds ngumu Sana!!! Not like the automatic refunds of the 90's In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 12/30/2012 Posts: 545 Location: NBI
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Angelica _ann wrote:Paye @30% every month computed annually. Refunds ngumu Sana!!! Not like the automatic refunds of the 90's Not quite 30%. We (kenya) do not use a flat tax rate. It is a schedule increasing with income. 30% is for income above 466,000(*) annually BITCOIN TRADERS KENYA Whatsapp group +254 705 299 429
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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The National Hospital Insurance Fund (NHIF) Board gazetted new NHIF contribution rates on 6th February 2015. The new rates take effect on 1 April 2015 and range from KShs 150 – KShs 1700 depending on the contributor’s monthly gross income. Life is short. Live passionately.
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Rank: New-farer Joined: 1/21/2015 Posts: 10 Location: Nairobi
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6th February, 2015
LEGAL NOTICE No. 14
THE NATIONAL HOSPITAL INSURANCE FUND ACT
(No. 9 of 1998)
IN EXERCISE of the powers conferred by sections 15 and 26 of the National Hospital Insurance Fund Act, the Board, in consultation with the Cabinet Secretary for Health makes the following Regulations:—
THE NATIONAL HOSPITAL INSURANCE FUND (STANDARD AND SPECIAL CONTRIBUTIONS) REGULATIONS, 2015
1. These Regulations may be cited as the National Hospital Insurance Fund (Standard and Special Contributions) Regulations, 2015.
2. Regulation 3 of the National Hospital Insurance Fund Act (Standard Contributions) Regulations, 2003, Legal Notice No. 107 is amended by deleting paragraph (3) and substituting therefore the following:
3. The rate of contribution shall be graduated as follows-
Gross Income (KSh.)
Proposed Premiums (KSh.)
5,999
150
6,000-7,999
300
8,000-11,999
400
12,000-14,999
500
15,000-19,999
600
20,000-24,999
750
25,000-29,999
850
30,000-34,999
900
35,000-39,999
950
40,000-44,999
1,000
45,000-49,999
1,100
50,000-59,999
1,200
60,000-69,000
1,300
70,000-79,999
1,400
80,000-89,000
1,500
90,000-99,000
1,600
100,000—and over
1,700
Self-employed (Special)
500
This Legal Notice shall take effect from the 1st April, 2015.
SIMEON OLE KIRGOTTY,
Chief Executive Officer,
National Hospital Insurance Fund.
MOHAMUD MOHAMED ALI,
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Rank: Elder Joined: 5/21/2013 Posts: 2,841 Location: Here
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What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? Life is like playing a violin solo in public and learning the instrument as one goes on.
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Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? me too iam waiting contributions to this
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Rank: Veteran Joined: 8/11/2010 Posts: 1,011 Location: nairobi
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Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? me too iam waiting contributions to this, which one would you prefer
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Rank: Member Joined: 2/20/2007 Posts: 767
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bartum wrote:Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? me too iam waiting contributions to this, which one would you prefer ....following..... They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? My limited knowledge As a company 1.You can carry forward losses into next financial year unlike a sole proprietorship 2.You liability in the company is limited unlike in the sole proprietorship where you personally assets can be attached incase of a liability 3.You stand a high chance of avoiding taxes when you register a company than with a sole proprietorship, E.g You can register you house, car etc in the business name which will allow you to deduct WTA before taxation. 4.Witha company, you can expense management expenses and fees unlike a sole proprietorship e.g salaries, rent,transportation etc. The main advantage of a company over a sole proprietorship is the reduced taxation If Obiero did it, Who Am I?
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Rank: Veteran Joined: 4/4/2007 Posts: 1,162
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Swenani wrote:Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? My limited knowledge As a company 1.You can carry forward losses into next financial year unlike a sole proprietorship 2.You liability in the company is limited unlike in the sole proprietorship where you personally assets can be attached incase of a liability 3.You stand a high chance of avoiding taxes when you register a company than with a sole proprietorship, E.g You can register you house, car etc in the business name which will allow you to deduct WTA before taxation. 4.Witha company, you can expense management expenses and fees unlike a sole proprietorship e.g salaries, rent,transportation etc. The main advantage of a company over a sole proprietorship is the reduced taxation Thanks@swenani
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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Swenani wrote:Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? My limited knowledge As a company 1.You can carry forward losses into next financial year unlike a sole proprietorship 2.You liability in the company is limited unlike in the sole proprietorship where you personally assets can be attached incase of a liability 3.You stand a high chance of avoiding taxes when you register a company than with a sole proprietorship, E.g You can register you house, car etc in the business name which will allow you to deduct WTA before taxation.4.Witha company, you can expense management expenses and fees unlike a sole proprietorship e.g salaries, rent,transportation etc. The main advantage of a company over a sole proprietorship is the reduced taxation True @swenani. Not only do you get to claim Wear and Tear on your assets but also your asset maintenance expenses e.g. Motor vehicle fuel, repairs, insurance, house repairs etc are deductible for taxation purposes KRA will however expect you to compute tax from the salary you pay yourself for the benefit of a company car(if it doubles as your personal car) and housing benefit for the house you live in
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Angelica _ann wrote:Paye @30% every month computed annually. Refunds ngumu Sana!!! Not like the automatic refunds of the 90's Refunds only paid when you file returns indicating negative tax due and giving your bank account details
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Rankaz13 wrote:What are the tax implications of operating my hardware shop as a company vs. as a sole-proprietorship? Assuming that you mean a LIMITED company, tax will be a flat 30% of profit. If proprietorship, tax will be according to normal individual tax brackets - same as PAYE brackets
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Rank: Veteran Joined: 1/3/2014 Posts: 1,063
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chiaroscuro wrote:Angelica _ann wrote:Paye @30% every month computed annually. Refunds ngumu Sana!!! Not like the automatic refunds of the 90's Refunds only paid when you file returns indicating negative tax due and giving your bank account details KRA never pays any refund unless you offset the future tax payable from this amount. Consistency is better than intensity
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Rank: Veteran Joined: 1/3/2014 Posts: 1,063
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If you have several businesses,you will pay less tax if you register some businesses under your wife's name rather than registering everything under your name. Consistency is better than intensity
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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PeterReborn wrote:If you have several businesses,you will pay less tax if you register some businesses under your wife's name rather than registering everything under your name. Limited Liability companies? If yes, it doesn't make a difference whether you are the principal shareholder in all or not; each is an independent taxpayer in the eyes of the law. You are also seen as a independent taxpayer - you pay only WTH on dividends that you are paid by your companies
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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PeterReborn wrote:If you have several businesses,you will pay less tax if you register some businesses under your wife's name rather than registering everything under your name. If your wife already has other sources of income exceeding Kshs 466 P.a the only difference will be the monthly tax relief of Kshs 1,162 since the two of you will be claiming separately.If she has no other source of income,the tax difference will be marginally savings made due to the savings made on the graduated tax rates on your income in excess of 466k If Obiero did it, Who Am I?
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