The Kenya Revenue Authority has written E-mails to teachers who marked last year’s examinations requiring them to pay with holding taxes when they file their 2019 returns. The E-mail seen by our crew requires the teachers to remit 20% of their marking fees earnings to the tax collector in 2019. The Kenya National Examinations Council, KNEC, paid 5% tax that was deducted from total earnings by the contracted officers. Contact KRA at any Huduma Centre close to you for any queries, assistance and/ or clarifications.
The big question, then, begs..’what is withholding tax? How can withholding tax be paid’?
WHAT IS WITH HOLDING TAX, HOW CAN ONE PAY WITH HOLDING TAX?
This is a method whereby the payer of certain incomes is responsible for deducting tax at source from payments made and remitting the deducted tax to KRA.
The percentage deducted varies between incomes and is dependent on whether you are a resident or non- resident.
The relevant rates are as follows:
| Description | Resident | Non – Resident |
| Artists and entertainers | – | – |
| Management fees | 5% | 20% |
| Professional fees | 5% | 20% |
| Training fess (inclusive of incidental costs) | 5% | 20% |
| Winnings from betting and gaming (w.e.f. 1 Jan 2014) | 20% | 20% |
| Royalties | 5% | 20% |
| Dividends (nil for resident shareholders with>12.5%) | 5% | 10% |
| Equipment (movable) Leasing | N/A | 5% |
| Interest (Bank) | 15% | 15% |
| Interest (Housing Bond – HBI) | 10% | 15% |
| Interest on two – year government bearer bonds | 15% | 15% |
| Other bearer bonds interest | 25% | 25% |
| Rent – buildings (immovable) | 12% | 30% |
| Rent – others (except aircraft) | N/A | 15% |
| Pensions/provident schemes (withdrawal) | 10 – 30% | 5% |
| Insurance Commissions | 10% | 20% |
| Consultancy and agency(from 1 July 2003) | 5% | 20% |
| Contractual and agency (from 1 July 2003) | 3% | 20% |
| Telecommunication services/Message transmission | – | 5% |
| Natural Resource Income (w.e.f. 01/01/2015) | 5% | 20% |
How do I pay Withholding Tax?
Any amount withheld, should be remitted to KRA on or before the 20th day of the following month.
- Paying via the Itax Portal:
Payment of withholding tax is done online via iTax, generate a payment slip and present it at any of the appointed KRA banks to pay the tax due.
Read more details here…SIMPLIFIED PROCEDURE FOR FILING TAX RETURNS, ONLINE
- You can also pay via Mpesa.
- Use the KRA Pay bill Number 572572.
- The Account Number is the Payment Registration number quoted at the top right corner of the generated payment slip.
When you successfully remit the deducted amount to KRA, the KRA shall send a Withholding Certificate to the email you registered with on iTax.
You should then declare these certificates as you file your individual income tax returns and pay any tax due after deducting your expenses.
What is the penalty for late filing?
- Date: Deducted and remitted on or before the 20th of the following month.
- Penalty: Either 10% of the amount of the tax involved or a maximum penalty of up to Kshs. 1 million.
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