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M-PESA Paybills to Become Virtual Tax Registers by December 2024.

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  The Kenyan government has announced a bold move to transform all M-PESA paybills and Till numbers into virtual Electronic Tax Registers (ETRs) by December 25, 2024. This initiative is part of the government’s broader strategy to integrate mobile money transactions into the tax framework, aimed at improving compliance and capturing previously unreported business activities. As mobile money plays a critical role in Kenya’s economy, this new directive has far-reaching implications for businesses, consumers, and the national revenue collection system. The Process Implementation Timeline and Scope Deadline: December 25, 2024. Scope: All M-PESA paybills and Till numbers will be converted into virtual Electronic Tax Registers (ETRs). Steps for Integration System Integration : KRA will collaborate with mobile service providers (e.g., Safaricom) to ensure that M-PESA paybill and Till transactions are seamlessly integrated into KRA’s tax systems. Monitoring Mechanism : KRA will monitor all tra
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Social Health Authority Registration

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                                                              Social Health Authority Registration The  Social Health Authority (SHA)  in Kenya is set to officially launch on  October 1, 2024 , marking a significant transition from the National Hospital Insurance Fund (NHIF). As of late September 2024, approximately  1.2 million individuals  have registered under the new SHA scheme. STEPS FOR REGISTRATION To register for the  Social Health Authority (SHA)  in Kenya, follow these steps: Online Registration Visit the SHA Website : Go to  SHA.go.ke . Click the “Register Individual” or “Register employers ”Button on the homepage. Fill Out the Registration Form : Enter your personal details, including: National ID Number Phone Number (for OTP verification) Click “Proceed” : Submit your information and move to the next step. Select ID Type : Choose “Kenyan Citizen” as your ID type. Enter Your Natio
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New Levy Imposed on Government Contractors and Suppliers.

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  Effective September 1, 2024, the Kenyan government has introduced a new levy that directly impacts contractors and suppliers providing goods and services to both national and county governments. This levy is part of a broader strategy to enhance compliance and streamline public procurement processes. In this newsletter, we will outline the key details of the levy, its applicability, and the obligations for both suppliers and procuring entities.
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Tax Procedures (Amendment) Bill, 2024

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  The Tax Procedures (Amendment) Bill, 2024, recently introduced to Parliament, seeks to amend key provisions of the Tax Procedures Act. These amendments are designed to provide relief to taxpayers and improve tax compliance. The changes include extending tax amnesties, allowing relief in difficult tax recovery cases, and revising timelines for filing tax objections. This newsletter outlines the major updates and their implications for businesses and individual taxpayers. Tax Amnesty Extension One of the notable amendments is the extension of the tax amnesty period, which was previously set to expire on June 30, 2024. The new deadline is now June 30, 2025, giving taxpayers an additional year to settle their principal tax without facing penalties or interest. This extension aims to encourage compliance by offering relief to those who may have struggled to meet the earlier deadline . Relief for Unrecoverable Taxes The Bill introduces a new provision that allows the Commissioner t
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Appointment of Rental Income Tax Agents in Kenya

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Appointment of Rental Income Tax Agents in Kenya The Finance Act, 2023 introduced Section 42C to the Tax Procedures Act, granting the Commissioner of the Kenya Revenue Authority (KRA) the authority to appoint rental income tax agents. These agents are responsible for collecting and remitting rental income tax on behalf of taxpayers to the Commissioner. Appointment Process The Commissioner appoints rental income tax agents in writing and notifies them of the requirement to withhold tax on rental payments. Notices of appointment can be sent through electronic means. The target agents are typically large tenants and property management companies. Obligations of Appointed Agents Withhold tax at a flat rate of 7.5% on the gross rent paid to resident landlords. Remit the withheld tax to KRA by the 20th day of the month following the rent payment. Provide the landlord with a certificate stating the amount of rent and tax deducted.
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Impact of New Custom Levies on Imported Cereals

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  The Kenyan government has recently introduced new levies on imported cereals, a move expected to have significant implications for both importers and consumers. Effective from August 12, 2024, the Agriculture and Food Authority (AFA) imposed a 2% levy on the customs value of all imported cereals and legumes, alongside a 0.3% levy on exports of these products. Initially slated for implementation on July 1, this decision follows Regulation 37 of The Crops (Food Crops) Regulations of 2019, which had been postponed. This newsletter aims to provide our clients with a comprehensive overview of these changes, their expected impact, and potential future developments. Impact on Prices and Trade The introduction of these levies is anticipated to lead to significant cost increases for traders. Estimates indicate that a truckload of maize will incur an additional KSh 20,000, while rice will see a hike of KSh 50,000. These additional costs come on top of existing charges from other government ag
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Understanding Tax Refunds

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  Understanding Tax Refunds. A tax refund in Kenya occurs when a taxpayer has paid more tax than their actual tax liability for a given period, typically a year. This overpayment can result from excess withholding tax, miscalculations, or other factors. The KRA processes these refunds and returns the excess amount to the taxpayer. How Tax Refunds Work Tax Filing : Individual Returns : Individuals must file their annual income tax returns by June 30th of the following year. This includes providing details of income, deductions, and other relevant information. Corporate Returns : Companies must file their returns within six months of the end of their financial year. Determining Overpayment : During the tax return process, if the total tax paid (through withholding or estimated payments) exceeds the tax liability calculated, a refund is due. This can result from: Excess PAYE : If an employee has had more tax
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