Thursday 27 August 2015

TAX ALERT - Tax amnesty for individual landlords!


Overview
  • The Government has granted a tax amnesty for individual landlords on their rental income.
  • Landlords are required to declare their rental incomes for the years of income 2014 and 2015, file returns and pay tax thereon by 30 June 2016 to qualify for the amnesty.
  • For 2013 and prior years of income, 100% of principal taxes, penalties and interest will be forgiven.
  • For the years of income 2014 and 2015, 100% of penalties and interest will be forgiven.
  • KRA will issue amnesty certificates for landlords who comply with terms of the amnesty.

Terms of amnesty

The government, through the Finance Bill 2015 has granted a tax amnesty for individual landlords on their rental income. To qualify for the amnesty, landlords will be required to declare their rental income, file returns online and pay principal taxes for the 2014 and 2015 years of income by the 30 June 2016.










Implications

The amnesty effectively means that a taxpayer in default can declare and pay the principal taxes for the years of income 2014 and 2015 and all other taxes on the rental income, penalties and interest will be forgiven. 

In case of unavailability of expense receipts, the taxpayer is  allowed to deduct 40% of the gross receipts as expenses. 

Note however that the amnesty has not been extended to companies.

In addition, the government has introduced simplified tax compliance for Resident landlords earning KShs 10 million or less per annum from residential properties with effect from 1 January 2016. They will pay a monthly flat rate of 10% of the gross rental income. This will be a final tax.

Further, the government has introduced a withholding tax of 12% on rental income wef 1 January 2016. The commissioner will appoint withholding tax agents. The withholding tax will be an advance tax.

Resident landlords who wish to remain under the current tax regime will be required to write to the commissioner for approval. 

Recommendations

The amnesty is a welcome relief for individual landlords, some of whom have failed to comply out of ignorance or the high cost of compliance. Landlords who take advantage of the amnesty will avoid the burden of principal taxes, penalties, interest and potential prosecution for tax evasion.  

We recommend that individual landlords should contact their tax agents to take advantage of the amnesty.

To contact us:

East African Tax Consulting
Mobile: +254 722 332729
Email: starlings@taxeac.com 
Contacts: Starlings Muchiri, Samuel Karanja

Thursday 23 April 2015

NHIF rates increased from April 2015

The National Hospital Insurance Fund (NHIF) Board gazetted new NHIF contribution rates on 6th February 2015.

The new rates take effect on 1 April 2015 and range from KShs 150 – KShs 1700 depending on the contributor’s monthly gross income.



We advise employers to amend their payroll and deduct NHIF contributions based on the new rates, beginning with the payroll for April 2015.

The deductions should be remitted to NHIF by the 9th of the subsequent month. Failure to do so attracts a penalty of five (5) times the contribution due.

Contact us in case you need more information or assistance:


East African Tax Consulting
Branton Court, Ndemi Lane (off Ngong Road)
Nairobi, Kenya
+254722332729
starlings@taxeac.com

Wednesday 18 March 2015

Tax and Regulatory Compliance for Not for Profit Organisations in Kenya

These slides summarize the Tax and Regulatory compliance requirements for NPOs/ NGOs/ PBOs in Kenya as at March 2015.





Contact us:
East African Tax Consulting
Branton Court, Ndemi Lane (off Ngong Rd)
Nairobi, Kenya
+254722332729
starlings@taxeac.com

Tuesday 3 February 2015

Tax Alert! Capital Gains Tax Guidelines

The commissioner of income tax has issued guidelines on collection and accounting for Capital Gains Tax (CGT) on land, buildings and marketable securities.

This Alert looks at some of key aspects of the guidelines and implications thereof.



East African Tax Consulting
Tel: +254 722 332729
Email: starlings@taxeac.com
Contacts: Starlings Muchiri, Samuel Karanja