RWK Financial Compass

  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.

  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 Commission...

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 deduc...