NewsKRA Lists Kenyans Exempted from Minimum Tax

KRA Lists Kenyans Exempted from Minimum Tax

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  • The Kenya Revenue Authority (KRA) highlighted a section of Kenyans who will be exempted from Minimum Tax that took effect on Friday, January 1.

    Among those exempted include persons who engaged in business whose retail price is controlled by the Government and persons engaged in the insurance business.

    This is according to the Tax Laws (Amendment) Act No 2 of 2020.

    Times Tower, KRA headquarters in Nairobi
    File

    According to reports, the Kenyan insurance industry boasts of over 287 market players with insurance brokers taking the lion’s share of 178 registered companies.

    Furthermore, other scenarios where persons are exempted from the minimum tax include: persons paying residential rental income tax, where income is subject to employment taxes, persons paying turnover tax and where taxes are due and payable from mining and petroleum activities.

    The Minimum Tax was introduced under the Finance Act 2020 whereby Kenyans are expected to pay the tax whether they are making profits or not.

    The rate of Minimum Tax is 1 percent of the gross turnover of the company and shall be payable on the 20th day of the 4th, 6th, 9th and 12th months. 

    The notice also highlighted the end of the Covid-19 tax relief whereby all taxes reverted to the initial tax rates before the onset of the pandemic.

    The corporation tax reverted to 30% from 25% as well as the Value Added Tax also reverted to 16% from 14%. 

    For resident individuals paying the employment income tax, the monthly tax relief still stood at ksh2,400 per month which accumulates to Ksh28,800 annually. 

    Treasury Cabinet Secretary Ukur Yatani had noted that the government had put measures to cushion low income earners by retaining 100% tax exemption for those earning a monthly income of 24,000 and below.

    Treasury CS Ukur Yatani addresses the media on November 25, 2020, in Nairobi
    Treasury CS Ukur Yatani addresses the media on November 25, 2020, in Nairobi
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  • Source: KENYAGIST.COM

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