Question 1

When is my annual tax return due?

Accepted Answer

Annual tax returns (ITR) must be filed by June 30th of each year for the previous year's income. Late filing attracts penalties.

Question 2

Do I need to register for VAT?

Accepted Answer

VAT registration is mandatory if your annual turnover exceeds KES 5 million. It's optional for businesses below this threshold, but once registered, you must remain registered for at least 2 years.

Question 3

What is the difference between TOT and VAT?

Accepted Answer

Turnover Tax (TOT) is a simplified tax at 3% for small businesses with turnover below KES 50M. VAT is 16% but you can claim back input VAT. TOT is simpler but you can't claim back VAT on purchases.

Question 4

Can I deduct rental expenses?

Accepted Answer

Yes, many expenses related to rental property are deductible, including repairs, management fees, insurance, property rates, and interest on mortgages. Keep all receipts for at least 5 years.

Question 5

Is tax.ke affiliated with KRA?

Accepted Answer

No, tax.ke is not affiliated with KRA. We provide educational resources and tools to help you understand and manage your taxes. Always consult a qualified tax professional for specific advice.

Question 6

How is PAYE calculated?

Accepted Answer

PAYE uses progressive tax rates: 10% on first KES 288,000/year, 25% on next KES 100,000, and 30% on remaining amount. Personal relief of KES 2,880/month is deducted first.

Question 7

What happens if I don't file my tax return?

Accepted Answer

Late filing attracts penalties of KES 10,000 or 5% of tax due (whichever is higher), plus interest on unpaid tax. KRA can also estimate your tax liability if you don't file.

Question 8

Do I need eTIMS if I'm VAT registered?

Accepted Answer

Yes, eTIMS is mandatory for all VAT-registered businesses. You must generate all invoices through eTIMS, which automatically syncs with KRA. Non-compliance can result in penalties.

Question 9

What is Capital Gains Tax?

Accepted Answer

CGT is 5% of the profit when you sell property or assets. It's calculated as 5% of (sale price - purchase price - improvements). Must be paid within 30 days of sale.

Question 10

Can I claim insurance relief?

Accepted Answer

Yes, you can claim 15% of insurance premiums (life, health, education policies) up to a maximum of KES 5,000 per month (KES 60,000 per year).

Question 11

What records should I keep?

Accepted Answer

Keep all receipts, invoices, bank statements, and tax documents for at least 5-7 years. This includes business expenses, rental income records, and all tax filings.

Question 12

How do I register for taxes?

Accepted Answer

Register through the KRA iTax portal (itax.kra.go.ke). You'll need your ID, PIN certificate, and business registration documents if applicable. Registration is free.

Question 13

What is the Housing Levy?

Accepted Answer

The Housing Levy is 1.5% of gross salary, deducted by employers and remitted to KRA. It's separate from PAYE and applies to all employees.

Question 14

Do I pay tax on income from abroad?

Accepted Answer

Kenya taxes worldwide income for residents. However, double-taxation treaties may apply to prevent being taxed twice. Consult a tax professional for your specific situation.

Question 15

What is Withholding Tax (WHT)?

Accepted Answer

WHT is tax deducted at source from payments like rent, professional fees, and dividends. The rate varies (5-20% depending on the payment type). You can claim credit for WHT paid.

Question 16

Can I file my taxes online?

Accepted Answer

Yes, all tax returns can be filed online through the KRA iTax portal. You can file from anywhere in the world. You'll need your KRA PIN and password.

Question 17

What if I can't pay my taxes on time?

Accepted Answer

Contact KRA immediately to arrange a payment plan. Late payment attracts interest and penalties. It's better to communicate early than to ignore the obligation.

Question 18

Are there tax-free allowances?

Accepted Answer

Yes, personal relief of KES 2,880/month, insurance relief up to KES 5,000/month, and mortgage interest relief up to KES 25,000/month are available to reduce taxable income.

Question 19

What is the difference between gross and net salary?

Accepted Answer

Gross salary is your total pay before deductions. Net salary is what you receive after PAYE, NSSF, NHIF, and Housing Levy are deducted. Always negotiate based on gross salary.

Question 20

Do small businesses need to pay tax?

Accepted Answer

Yes, all businesses must pay tax. Small businesses can use TOT (3% of turnover) if turnover is below KES 50M, or register for VAT if above KES 5M. Even sole proprietors must file returns.

Question 21

What expenses can I deduct from rental income?

Accepted Answer

Repairs, maintenance, management fees, insurance, property rates, legal fees, advertising, cleaning, security, and mortgage interest. Capital improvements are not deductible.

Question 22

How often do I need to file VAT returns?

Accepted Answer

VAT returns are filed monthly by the 20th of the following month. You must file even if you have no sales or purchases in that month (nil return).

Question 23

What is a P9 certificate?

Accepted Answer

P9 is a certificate showing your annual PAYE deductions. Your employer must provide it by January 31st. You need it to file your annual tax return and when changing jobs.

Question 24

Can I get a tax refund?

Accepted Answer

Yes, if you overpaid tax (e.g., through PAYE or if input VAT exceeds output VAT), you can claim a refund. File your return and KRA will process the refund within 30-90 days.

Question 25

What is the penalty for late PAYE payment?

Accepted Answer

Late PAYE payment attracts 5% penalty plus 1% interest per month on the unpaid amount. Employers must remit PAYE by the 9th of the following month.

Tax Resources

Knowledge Base

PAYE Guide

Tax Reliefs and Exemptions

Annual Filing (ITR)

Benefits-in-Kind

HELB Deductions

VAT Registration and Filing

Turnover Tax (TOT)

Withholding Tax (WHT)

Corporate Income Tax

Business Compliance

Record Keeping

Rental Income Tax

Capital Gains Tax

Rental Expenses

Property Tax Reports

Filing from Abroad

Cross-Border Taxation

Remittance Tax

Tax Residency

Double Taxation Treaties

Payroll Management Guide

Corporate Expenses Guide

eTIMS E-Invoicing

eTIMS API Documentation

Frequently Asked Questions

Beyond Resources: eTIMS Integration

Tax Glossary

PAYE

VAT

TOT

CGT

WHT

ITR

eTIMS

NSSF