Rules under section 130
THE INCOME TAX (PAYE) (Amendment) Rules, 2010
[L.N. 257/1973, L.N. 122/1986, L.N. 201/1986, L.N. 319/1987, L.N. 31/1994, L.N. 98/2001, L.N. 175/2001, L.N. 80/2008, L.N. 90/2009, L.N. 84/2010, L.N. 54/2011, L.N. 107/2015.]1. Citation.
These Rules may be cited as the Income Tax (PAYE) Rules.2.Interpretation
(1) In these Rules, unless the context otherwise requires -
"relief claim form" means the relief claim form provided, or in a particular case authorized, by the Commissioner on which an employee claims the reliefs to which he is entitled under Part V of the Act;
"Commissioner" includes an officer authorized in writing by the
Commissioner to exercise and perform functions conferred upon the
Commissioner under these Rules;
"emoluments" means -
- (a) gains or profits from employment or services rendered which are payable in money; and
- (b) the value of housing provided by an employer ascertained under section 5(3) of the Act; and
- (c) The value of benefit or facility provided by the employer, where the total value exceeds three thousand shillings per month; and
- (d)
in the case of a resident individual, the amount of the pension in excess of one hundred and fifty thousand shillings per year- - but does not include gains or profits which, in the opinion of the Commissioner, are in respect of casual employment only;
"employee" includes an individual receiving emoluments in respect of any
employment, office, appointment or past employment;
"monthly pay" means, in relation to a month, the emoluments receivable
by an employee during that month, calculated in accordance with the Act and
these Rules;
"monthly personal relief", in relation to a month, means that amount of
personal relief to which an employee is entitled in that month in accordance with
the relief claim form which he has completed together with any other amount for
that month notified to the employer by the Commissioner, and unused monthly
personal relief, from a previous month or months in the same year of income;
"monthly personal relief notification" means a notification provided by
the Commissioner to the employer with respect to monthly personal relief of the
employee;
"tax deduction card" means the tax deduction card in the form provided
by the Commissioner, or such other document corresponding to a tax deduction
card as may be authorized by the Commissioner in a particular case, and on
which the information that the Commissioner may direct with respect to tax is
recorded;
"tax tables" means the tables of income tax computed by the
Commissioner in accordance with the rates of income tax specified in the Act for
a year of income;
"unused personal relief", in relation to a month or months in the same
year of income, means that amount of monthly personal relief as is in excess of
the tax payable under these Rules in that month or months.
(2) Nothing in these Rules shall apply to an employer none of whose
employees receive emoluments exceeding three thousand six hundred shillings
per annum or such greater sum as the Commissioner may, by notice in the
Gazette, specify.
3.Application of Section 128 of Act.
Section 128 of the Act shall apply to a notice or other document
which is authorized or required to be given, served or issued by the
Commissioner under these Rules.
4.Deduction of tax.
(1) An employer who makes a payment of, or on account of,
emoluments during a month to an employee of his who is liable to payment of
tax shall deduct tax from those emoluments in accordance with these Rules.
(2) An employer who fails to comply with the requirement of
paragraph (1) shall be guilty of an offence.
5.Calculation of monthly tax due.
An employer shall in each month calculate, by reference to the
tax tables, the tax due from each of his employees in that month having regard to
the monthly personal relief of that employee.
- Provided that an employee shall be entitled to a relief from only one employer.
6.Calculation of deduction and maintenance of records.
(1) On the occasion of the last payment of emoluments in a month to
an employee, the employer shall, except where these Rules otherwise provide,
ascertain, in respect of that month, the monthly pay of the employee, the
monthly tax chargeable thereon, and the monthly personal relief of the
employee.
(2) If, in the case of an employee, the tax chargeable for a month exceeds his monthly personal relief then the employer shall deduct the amount of such excess from the last payment of emoluments in that month, but if the tax chargeable in a month is greater than the last payment of emoluments in that month:
- Provided that if the tax chargeable in any month is greater than the last payment of emoluments to the employee in that month, the employer shall deduct such amount of tax as is not recoverable from such payment from the first payment of emoluments in the following month and from any subsequent such payments as may be necessary to recover that amount.
(3) The employer shall, on the tax deduction card, record for every
month in which a payment of emoluments is made to an employee, such
particulars as the Commissioner may direct in respect of that payment.
(4) An employer who fails to comply with paragraph (2) or (3) shall
be guilty of an offence.
7.Notification of emoluments and tax deducted.
On the occasion of the last payment of emoluments in a month to
an employee, the employer shall in writing notify the employee of the total
amount of the emoluments paid by the employer to the employee during that
month, the total tax deducted from those emoluments and such other particulars
as the Commissioner may require.
8.**No heading**
(1) If an employee is aggrieved by a calculation with respect to the
deduction of tax from his emoluments and is unable to reach agreement with his
employer,
then –
- (a) the employer shall inform the employee of his rights under this rule and shall, at the request of the employee, furnish the employee with a written statement showing the manner in which the employer arrived at that calculation;
- (b) the employee may give notice of objection in writing to the Commissioner, but that notice shall be valid only if –
- (i) it states precisely the grounds of his objection;
- (ii) there is enclosed therewith the written statement furnished by his employer; and
- (iii) it is received by the Commissioner within thirty days of the date on which that statement was received by the employee.
(2) On receipt of a notice of objection under this rule the
Commissioner shall consider the objection and, subject to and in accordance
with these Rules, may amend the calculation or reject the objection.
(3) The Commissioner shall forthwith notify the employer and the
employee in writing of his decision on an objection and thereafter on the
occasion of payment to that employee in any month of, or on account of,
emoluments the amount of tax deducted therefrom by the employer shall be in
accordance with that decision.
(4) Notwithstanding that a valid objection has been made, on the
occasion of payment to the employee in any month of, or on account of,
emoluments from which tax is to be deducted in accordance with these Rules,
the amount of tax deducted by the employer shall be in accordance with the
calculation by the employer until the employer is notified by the Commissioner
of his decision with respect to the objection.
(5) Where an amount of tax has been deducted in excess of the
amount payable by reason of a decision of the Commissioner under this rule, the
Commissioner shall refund that amount to the employee.
9.End of month procedure.
At the end of every month, an employer shall compile, in the
manner that the Commissioner may direct, a list which shall include the name of
each employee in his employment from whose emoluments tax was deducted
during that month together with the particulars of the amount of tax deducted
and such other particulars as the Commissioner may require.
9A
Before the 10th day of the month following the end of each quarter, an
employer shall render to the Commissioner a return of emoluments made
to each employee in each of the three months, the tax deducted and such other particulars as the Commissioner may require.
- Provided that an employer who furnishes the returns of emoluments on a monthly basis using information technology shall not be required to furnish quarterly returns under this paragraph.
10.Payment of tax by employer.
(1) Before the tenth day following the end of every month or before
any other day which may be notified to him by the Commissioner, an employer
shall, subject to paragraph (2), pay, to such person as the Commissioner shall
direct, all amounts of tax which the employer has deducted under these Rules
during that month.
- Provided that in the case of a director, the due date shall be before the tenth day following the end of the month in which payment was made to the director, or the fourth month after the accounting date, whichever is the earlier.
(2) Paragraph (1) shall not apply to an employer in respect of a
month in which the total amount of tax deducted by him is less than one hundred
shillings, and in that case, or where in a month no tax is deductible by an
employer under these Rules, the employer shall send, before the tenth day
following the end of that month or before any other day which may be notified
to him by the Commissioner, to the Commissioner a certificate, in the form
authorized or provided by the Commissioner showing either that the amount of
tax which he deducted in that month was less than one hundred shillings or that
he deducted no tax in that month:
- Provided that when the amount of tax deducted by an employer in a month is less than one hundred shillings, that amount shall be added to the amount of tax deducted by him in the following month, or months, and when in a month the total of all those amounts is greater than one hundred shillings, the employer shall comply with paragraph (1), so however, that the employer shall comply with paragraph (1) in the month of December in each year notwithstanding that the total amounts of tax is less than one hundred shillings.
(3) A person to whom the Commissioner has, under paragraph (1),
directed that an employer pay tax shall keep a record of payment in the form that
the Commissioner may direct and shall enter therein particulars of tax which has
been paid to him.
(4) An employer who, having deducted tax under this rule fails to
account therefor in the manner that the Commissioner may direct, or who fails to
comply with paragraph (2), shall be guilty of an offence.
11.Employer failing to pay tax or to provide required certificates
(1) If, before the tenth day following the end of a month, or before a
later day that may have been notified to him by the Commissioner, an employer
has paid no tax under rule 10 for that month and the Commissioner is unaware
of the amount, if any which the employer is liable to pay, or the employer has
failed to provide the certificate mentioned in paragraph (2) of that rule, the
Commissioner may give notice to the employer requiring him to render, within
the time specified in the notice, a return showing the name of every employee to
whom he made a payment of emoluments in the period stated in the notice,
together with those particulars with regard to each employee that the notice may
require being particulars of –
- (a) a calculation under rule 5 appropriate to the employee's case;
- (b) the payments of emoluments made to the employee during that period; and
- (c) any other matter affecting the calculation of the tax which the employer was liable under these Rules to deduct from the payments of emoluments to the employee during that period.
(2) The Commissioner shall ascertain and certify to the best of his
knowledge and belief the amount of tax which the employer would have been
liable to pay under rule 10 in respect of the month in question had he complied
with the provisions of these Rules.
(3) The production of the return made by the employer under
paragraph (1), and of the certificate of the Commissioner under paragraph (2),
shall be sufficient evidence that the amount shown in the certificate is the
amount of tax which the employer would have been liable to pay under rule 10
in respect of the month in question had he complied with the provisions of these
Rules and a document purporting to be such a certificate shall be deemed to be
such a certificate until the contrary is proved.
(4) Where a notice given by the Commissioner under paragraph (1)
extends to two or more consecutive months, these Rules shall have effect as if
those consecutive months were one month.
(5) If the Commissioner is not satisfied that the amount paid in
respect of a month is the full amount which the employer would have been liable
to pay under rule 10 had he complied with these Rules, he may notwithstanding
that an amount of tax has been paid by the employer under that rule in respect of
that month give a notice under paragraph (1) of this rule and thereupon this rule
shall have effect monthly.
12.Recovery to tax
For purposes of the recovery of tax which an employer would
have been liable to pay under rule 10 had he complied with the provisions of
these Rules, that employer shall be deemed to have been appointed an agent of
his employee under section 96 of the Act.
13.Return by
employer at
end of each
year. Deleted by.L. N. No 90 11 June 2009 L. N. No 84 10 June 2010
14.Inspection of employer’s records.
(1) An employer, when called upon to do so by the Commissioner,
shall produce, in English or any other language which the Commissioner may
allow, for inspection, at the employer’s premises or at any other place the
Commissioner may require -
- (a) all wages sheets, salary vouchers, and other books, documents and records whatever relating to the calculation or payment of the emoluments of his employees in respect of the years or months specified by the Commissioner, or to the deduction of tax by reference to those emoluments; or
- (b) any of those wages sheets, salary vouchers and other books, documents and records which may be specified by the Commissioner.
(2) The Commissioner may, on the occasion of an inspection under
this rule, prepare a certificate, by reference to the information obtained from the
inspection, showing –
- (a) the tax which it appears from the documents and records so produced that the employer would have been liable to pay under rule 10 for the years or months covered by the inspection had he complied with the provisions of these Rules;
- (b) the tax which, to the best of his knowledge and belief, has not been paid as the Commissioner has directed.
(3) The production of the certificate mentioned in paragraph (2) shall
be sufficient evidence that the employer is liable to pay, in respect of the years or
months mentioned in the certificate, the amount shown therein pursuant to
paragraph (2)(b), and a document purporting to be such a certificate shall be
deemed to be such a certificate until the contrary is proved.
15.Death of employer
If an employer dies, anything which he would have been liable to
do under these Rules shall be done by his personal representatives, or, in the case
of an employer who paid emoluments on behalf of another person, by the person
succeeding him, or if no person succeeds him, the person on whose behalf he
paid those emoluments.
16.Change of employer.
Where there has been a change in the employer from whom an
employee receives emoluments in respect of the same employment, the
employer after the change shall, in relation to a matter arising after the change,
be liable to do anything which the employer before the change would have been
liable to do under these Rules if the change had not taken place, but the
employer after the change shall not be liable for payment of tax which was
deductible from emoluments paid to the employee before the change took place.