Sunday 12 June 2011

Filing the Individual returns- No more worries

The Kenyan 2011/2012 Budget came with the following tax ammendment that directly and immediately affects you as a tax pay.

(a) Individual Self Assessment Income Tax Returns Abolished - Fully Taxed PAYE Cases Only

(b) Withholding Tax on Management, Professional Fees or Training Fee Increased from 5% to 10%

The Minister for Finance has abolished individual self assessment annual income tax returns under the following conditions:-

1. Individuals that have no other source of taxable income other than employment income, are with immediate effect exempted from filing end of the year self assessment income tax returns.
2. The law took effect from this week (Thursday 9th June 2011). This also means that those fulfilling the stated condition i.e. have no other source of income other than employment income and have been fully taxed under PAYE at source, do not need to make returns for last year ( i.e. year 2010) going forward.

3. Those who have not been fully taxed at source (under PAYE rules) must still however make returns and pay any tax balances.

4. Those needing to claim income tax refunds, still need to make returns in the normal manner in order to get applicable refunds

The Minister increased withholding tax rate as follows :-
5. Withholding Tax : with effect from Thursday 9 June 2011. The rate of withholding tax was increased from 5% to 10%. This applies to management, professional fees and training fee.

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