NEWSLETTER

INDIVIUAL TAX BAND AND RESIDENT PERSONAL RELIEF

Effective from 1st January 2018

Revised Individual Tax Bands and Rates

The new tax bands are as follows:-

	Annual	Monthly	Rates
On the first	Kshs 147, 580	Kshs 12, 298	10%
On the next	Kshs 139, 043	Kshs 11, 587	15%
On the next	Kshs 139, 043	Kshs 11, 587	20%
On the next	Kshs 139, 043	Kshs 11, 587	25%
On all income over	Kshs 564, 709	Kshs 47, 059	30%

Resident's Personal Relief

The Resident Personal Relief has been increased from Kshs.15, 360 per annum (Kshs. 1,280 per month) to Kshs 16,896 per annum (Kshs.1, 408 per month)

Employers, employees and other individual taxpayers are advised to implement the above changes while computing the taxes for periods beginning 1st January 2018.

Monthly Pay

This is income in respect of any employment or service rendered, accrued in or derived from Kenya. This will include:

1. Wages, salary, leave pay, sick pay, payment in lieu of leave, directors fees and other fees, overtime, commission, bonus, gratuity or pension whether payable monthly or at longer or shorter intervals.

2. Cash allowances e.g. house or rent allowance, telephone allowance, round sum allowance etc.

3. The amount of any private expenditure of the employee paid by the employer otherwise than as a loan, e.g. house rent, grocery bills, electricity, water, telephone bills, school fees, iv. Non-cash benefits when the aggregate value exceeds Kshs.3000 per month.

4. The value of housing, where provided by the employer. Cash allowances, e.g. house or rent allowance, telephone allowance, round sum allowance etc.

The ARC team in Kenya headed by Ashvin Ranpara(ranpara@kenexnbi.com) has extensive experience inassisting the clients in preparation of Client Monthly Payrolls.