Kenya Taxes for Expats: What You Need to Know
Tax in Kenya for Non-Kenyan Residents
With the current tax system in Kenya, non-Kenyan residents are required to pay taxes on their capital gains.
This is a clear shift away from the past when non-Kenyan residents were not liable for paying taxes in Kenya.
This article will look at the implications of this recent change and how it affects foreign investors who live in Kenya. It will also outline some of the tax exemptions available to them.
Tax Rates in Kenya
Kenya is a typical emerging economy with a limited tax base. The taxes collected are below 30% of the GDP.
The development of Kenya’s tax system has been flawed by corruption, political interference, and economic mismanagement.
Kenya’s taxation system is not without its flaws; one of which is the high amount of revenue leakage due to tax evasion or avoidance.
See more: Employer of Record Services in Kenya (EOR Kenya)
Taxes Kenyans Have to Pay
Taxes are mandatory contributions that people make to their government. These contributions can take the form of goods and services, goods only, or money.
The Kenyan Government levies taxes on different levels. The first level is on personal income where taxpayers are required to pay a standard rate of 20%. Individuals who earn more than KES 2 million annually are taxed at a higher rate of 30%.
Taxes are mandatory contributions that people make to their government. These contributions can take the form of goods and services, goods only, or money. The Kenyan Government levies taxes on different levels. The first level is on personal income where taxpayers are required to pay a standard rate of 20%. Individuals who earn more than KES 2 million annually are taxed at a higher rate of 30%.
Tax Credits and Deductions under Kenyan Tax Law
The government of Kenya has enacted a number of tax credits and deductions for individuals and businesses to help them ease the burden of taxation.
One credit available to individuals is a personal relief credit. This is a non-refundable tax credit that reduces one’s taxable income by 20% of the total income earned by an individual during the year.
A Guide to Income Tax in Kenya
An individual can be taxed on his income in various ways. This is done by the government in order to use the taxes to fund its operations. The individual’s tax return is used by the government to calculate how much taxes he owes for that year.
The Kenya Income Tax Act of 2017 has introduced new changes for this tax year, like increasing the rates of Personal Income Tax (PIT) and Capital Gains Tax (CGT). Other changes include introducing new categories of taxpayers, increasing deductions, and updating procedures in line with international standards.
