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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

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.

  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

  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

  EXPLAINING TAX APPEALS PROCESS. RWK & Associates CPA(K) is pleased to present our latest newsletter, focusing on the essential procedures for tax appeals in Kenya. Understanding these procedures is crucial for taxpayers who wish to contest tax assessments or decisions made by the Kenya Revenue Authority (KRA). This newsletter aims to provide a comprehensive overview of the steps involved, ensuring that our clients are well-informed and prepared to navigate the tax appeal process effectively. TAX APPEAL PROCESS. The first step in the tax appeal process is the Initial Dispute Resolution, which begins with the submission of a Notice of Objection. Taxpayers must file this notice within 30 days of receiving a tax assessment from the KRA. The notice should clearly outline the grounds for contesting the assessment and include any supporting documents.  Following this, the KRA has 60 days to respond to the objection. Depending on their findings, the KRA may either allow the objection, ad

  The Kenya Revenue Authority (KRA) has proposed significant changes to the method of valuing used motor vehicles for customs purposes, which may have considerable implications for motorists and importers. Proposed Changes KRA plans to shift from the Current Retail Selling Price (CRSP) method to the Transaction Value method for valuing used vehicles. This change is intended to align with a court ruling and directives from the East African Community (EAC) to use Free On Board (FOB) values for vehicle imports. The Transaction Value method considers the actual price paid for the vehicle, which could lead to higher duty charges if the declared transaction value exceeds the previous retail estimates. Impact on Motorists and Importers Increased Costs: The new valuation method is expected to increase the import duties on used cars. For instance, the maximum depreciation rate has been reduced from 70% to 65%, meaning that the taxable value of vehicles will be higher, resulting in increased tax