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Minimum Tax And Instalment Tax

Imposition of Minimum Tax:(Wef 01Jan2021)

  • This is tax payable by all persons whether you make profit or not.

Rate: 

Effective Date:

  • 01/01/2021

Due Date:

  • 20th Day of 4th, 6th, 9th and 12th month of the year of income.
Penalties:

Condition: 

  • Either Minimum tax or Instalment Tax is payable, whichever is higher.

Exemptions from Minimum Tax:

  • Employment Income.
  • Income exempted by this Act.
  • Incomes of extractives sector.
  • Incomes that is subject to:
    • Residential Rental income tax,
    • Turnover Tax,
    • Capital Gains Tax.

Imposition of Instalment Tax

Instalment Assessments:
  • Where a person has not paid instalment tax for a year of income commissioner can assess him(S.74A)
Conditions:
No instalment tax shall be payable if your total tax payable is less than Kes40k.(ITA.s.12A)
No instalment tax shall be payable if Minimum tax is higher than instalment tax.(ITA.s.12A)

PROVISIONS RELATING TO INSTALMENT TAX
This are set out in the twelfth schedule ITA

Due Date:

  • 20th Day of 4th, 6th, 9th and 12th* month of the year of income.(*Due on last day) at 25%
  • 20th Day of 9th(75%) and 12th(25%) month of the year of income. (If 2/3 of income is from agricultural, pastoral, horticultural or similar activities).

References: ITA s.12 and FA2020



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