Over 70 per cent of annual national budget funding comes from local taxes collected by the Kenya Revenue Authority.
The tax system features:
- corporate and personal income tax
- value added tax on goods and services
- customs and excise duties
- stamp duty.
There are also a number of statutory levies and social security payments.
Corporation tax is a form of income tax that is levied on companies. Resident companies are taxable at a rate of 30 per cent while non-resident companies are taxable at a rate of 37.5 per cent.
Withholding taxes are deducted from the following sources of income:
- management or professional fees
- pension or retirement annuity
- appearance or performance fees for entertaining, sporting or diverting an audience.
Taxes are collected by self-assessment and by withholding tax on payments to residents and non-residents. Employers are obliged to withhold and account for income tax on employee remuneration and benefits - Pay-as-you-earn (PAYE). Penalties and interest on non-compliance and late payment of taxes are onerous and the Kenya Revenue Authority conducts regular audits and investigations of taxpayers.
Visit Kenya Revenue Authority for further information.