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Kenya Tax Burden
Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Is there such a thing as a LLC having only one director?Is a sole proprietor Co. also entitled to those WTA deductions?
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:ChumviMacho wrote:Hello Wazuans,
I am desperate to reduce my taxes and wonder if anyone has tips on reducing their income tax. I have taken out an education policy and a HOSP (Home Ownership Savings Plan)but the saving is marginal. I know taxes are certain in life but wonder if you guys have other ideas on trimming your payables to KRA?
I am employed and run a small biz on the side. Inflation is biting hard and I am beginning to feel the heat in my pocket.
Again, there was talk last year about widening the tax bands, is that something we can lobby for? methinks taxing anyone earning less than 20K is immoral and for people earning less than 50K to be at the top rate is just not fair?
Any thoughts, ideas?
Register a company,then ask your current employer to employ you as a company and not as an individual. 
Brilliant answer.
Will you not pay the corporate tax @30% which will be higher than the graduated scale rates?
When your register a company,you can be able to deduct the following expenses creatively before taxation
1.Fuel /transport costs
2.WTA on your house(Register your house in the company's name and call it office premises)
3.Meals for your and your family(your can call it employee meals or employee welfare)
4.House keeping expenses(Office maintenance)
5.Savings
6.House helps salary(You can call it wages to casuals
etc.
7.Buy a company car and charge WTA.
8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc
Deduct everything and declare a loss to KRA
Yes, if you are working online. Not practical otherwise "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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murchr wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:ChumviMacho wrote:Hello Wazuans,
I am desperate to reduce my taxes and wonder if anyone has tips on reducing their income tax. I have taken out an education policy and a HOSP (Home Ownership Savings Plan)but the saving is marginal. I know taxes are certain in life but wonder if you guys have other ideas on trimming your payables to KRA?
I am employed and run a small biz on the side. Inflation is biting hard and I am beginning to feel the heat in my pocket.
Again, there was talk last year about widening the tax bands, is that something we can lobby for? methinks taxing anyone earning less than 20K is immoral and for people earning less than 50K to be at the top rate is just not fair?
Any thoughts, ideas?
Register a company,then ask your current employer to employ you as a company and not as an individual.
Brilliant answer.
Will you not pay the corporate tax @30% which will be higher than the graduated scale rates?
When your register a company,you can be able to deduct the following expenses creatively before taxation
1.Fuel /transport costs
2.WTA on your house(Register your house in the company's name and call it office premises)
3.Meals for your and your family(your can call it employee meals or employee welfare)
4.House keeping expenses(Office maintenance)
5.Savings
6.House helps salary(You can call it wages to casuals
etc.
7.Buy a company car and charge WTA.
8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc
Deduct everything and declare a loss to KRA
Yes, if you are working online. Not practical otherwise
You can declare some small profit so as not to spook KRA guys
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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whiteowl wrote:murchr wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:
Register a company,then ask your current employer to employ you as a company and not as an individual.
Brilliant answer.
Will you not pay the corporate tax @30% which will be higher than the graduated scale rates?
When your register a company,you can be able to deduct the following expenses creatively before taxation
1.Fuel /transport costs
2.WTA on your house(Register your house in the company's name and call it office premises)
3.Meals for your and your family(your can call it employee meals or employee welfare)
4.House keeping expenses(Office maintenance)
5.Savings
6.House helps salary(You can call it wages to casuals
etc.
7.Buy a company car and charge WTA.
8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc
Deduct everything and declare a loss to KRA
Yes, if you are working online. Not practical otherwise
You can declare some small profit so as not to spook KRA guys
I know some one man show that runs with some of Swenani's ideas
The owner's car is a company car. The wife and mum's car are also serviced by the company
Claims meals from the company
Supermarket shopping
Drawings are incorporated into expense lines
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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If you register your car as a company car, you will be taxed for car benefit depending on cost/cc of the car on your personal pay(salary)
You may opt to deduct your house rent from company expenses. This would however mean you(individual, not company) get taxed for house benefit! Adjust for that as well
But buying assets and registering them under the company is definitely a good idea. Claiming wear and tear as well as running/repair costs is an advantage
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Rank: New-farer Joined: 3/6/2014 Posts: 21
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There was a time they had talked widening the tax bands so that minimum taxable income goes up to say 20K. That kind of ended? Is there a way to lobby the minister in charge ahead of the next budget?
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Rank: Elder Joined: 3/18/2011 Posts: 12,069 Location: Kianjokoma
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2012 wrote:Increase your pension contribution to the maximum allowed by law (I think it's 20k) you'll get some good tax relief.
Yeah 20k is deductible for tax purposes per month
The insurance thing doesn't help much. While if you are deducting pension the entire amount upto 20k is deductible before computing tax, for insurance the relief is only 15% of the premium you pay and is capped at 5000 bob.
For example you earn 50k, you listen to those 'financial advisors' from Britam/Jubilee/ICEA...
You buy those funny insurance plans where you pay 10k premium monthly
Taxable pay=50,000-(15%*10,000)-200(nssf)-1162(personal relief)
On the other hand, if you take a pension for 10k
Taxable pay=50,000-10,000(pension)-200(nssf)-1162(personal relief)
So avoid those insurance plans if the purpose is to make tax savings. They give you very little and you can lose all your money if you fail to contribute. The reason they always want to sell them to you is that's where they make money. There's almost no money in pension for insurance companies!
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Amani254 wrote:There was a time they had talked widening the tax bands so that minimum taxable income goes up to say 20K. That kind of ended? Is there a way to lobby the minister in charge ahead of the next budget?
Last year,Iheard Rotich say they will introduce it in this year's budget,though the threshold was 50K if I'm not wrong If Obiero did it, Who Am I?
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Rank: New-farer Joined: 3/6/2014 Posts: 21
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It will be interesting to see this happen. Sometimes they put a notice in the papers calling for proposals/submissions ahead of the budget. Has anyone seen this? Any contacts/email address to send submissions? I really want to lobby for this.
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Rank: Elder Joined: 12/17/2009 Posts: 3,583 Location: Kenya
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PeterReborn wrote:Swenani wrote:PeterReborn wrote:kenmac wrote:Swenani wrote:ChumviMacho wrote:Hello Wazuans,
I am desperate to reduce my taxes and wonder if anyone has tips on reducing their income tax. I have taken out an education policy and a HOSP (Home Ownership Savings Plan)but the saving is marginal. I know taxes are certain in life but wonder if you guys have other ideas on trimming your payables to KRA?
I am employed and run a small biz on the side. Inflation is biting hard and I am beginning to feel the heat in my pocket.
Again, there was talk last year about widening the tax bands, is that something we can lobby for? methinks taxing anyone earning less than 20K is immoral and for people earning less than 50K to be at the top rate is just not fair?
Any thoughts, ideas?
Register a company,then ask your current employer to employ you as a company and not as an individual.
Brilliant answer.
Will you not pay the corporate tax @30% which will be higher than the graduated scale rates?
When your register a company,you can be able to deduct the following expenses creatively before taxation
1.Fuel /transport costs
2.WTA on your house(Register your house in the company's name and call it office premises)
3.Meals for your and your family(your can call it employee meals or employee welfare)
4.House keeping expenses(Office maintenance)
5.Savings
6.House helps salary(You can call it wages to casuals
etc.
7.Buy a company car and charge WTA.
8.Charge WTA on your company(of course its yours) electronics(TV;s phones, computers etc), furniture etc
Deduct everything and declare a loss to KRA
 You are a genius.
wewe @Swenani, naona wewe ni genius - saidia hapa.
my neighbor came across some guys willing to hire them as a consultant na waka kubaliana the coins they will pay after my neighbor delivers on some tasks;
my neighbor asked me these questions nikamwambia sina time, will answer him latter.
1. They say they will take care of withholding tax - sijui how that works. saidia hapo
2. can one invoice under their name, ama one must register a ka business name for that, if not does one weka pin number hapo kwa invoice.
3. how does consultancy income reflect on ones tax obligation, and must your pin be online.
4. if one has been out of employment for a very long time, will that ka gap in the tax records have issues.
niambie jirani nini? anyone who knows hii mambo saidia naomba
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