Businesses in Kenya are required to file a number of taxes, including:
- Corporate income tax (CIT): CIT is levied on the income of legal entities, including companies, partnerships, and trusts. The rate of CIT for resident companies is 30%.
- Pay As You Earn (PAYE): PAYE is a tax that is deducted from employees’ salaries and paid to the government by their employers. The rate of PAYE varies depending on the employee’s income.
- Value Added Tax (VAT): VAT is a tax that is levied on goods and services at every stage of the supply chain. The standard rate of VAT in Kenya is 16%.
- Excise duty: Excise duty is a tax that is levied on goods such as alcohol, tobacco, and fuel. The rates of excise duty vary depending on the good.
Businesses are required to file their taxes online via the iTax system. The deadline for filing CIT is the 30th June of the following year after the end of the accounting period. The deadline for filing PAYE is the 15th of the month following the end of the tax month. The deadline for filing VAT is the 20th of the month following the end of the tax period. The deadline for filing excise duty is the 15th of the month following the end of the tax period.
If a business fails to file its taxes on time, it may be subject to a number of penalties, including:
- Interest on the tax owed
- Penalties for late payment
- Enforcement action, such as a tax audit or a tax investigation
Businesses should take steps to ensure that they file their taxes on time and avoid penalties.