Filing your Taxes is an important thing for any Business. Evading tax is an offence and can lead to KRA slapping your business with a huge fine that cripples and kills your enterprise. These are some of the taxes you need to pay as a small or medium size business owner;
1. Turnover Tax – If the total sales you make annually is over 1,000,000 shillings (but less than 50,000,000 shillings) which means that you make sales of over 83,000 shillings per month, you are obligated to pay 1% of your gross monthly sales as tax.
2. Corporation Tax – If you are running a Company, then you are required to pay Corporation Tax of 30% on your annual income. If you are a non resident company you are obligated to pay 37.5% of your annual income as Corporation Tax.
3. Withholding Tax (WHT)
When you are running a business, this is a tax that you remit for certain classes of income that you pay at the point of making the payment to non-employees.
WHT is deducted at source from the following sources of income:
1. Paying Interest
2. Paying Dividends
3. Paying Royalties
4. Paying Management or professional fees (including consultancy, agency or contractual fees)
5. Paying Commissions
7. Rent received by non-residents
You should deduct WHT from this payments and remit it to KRA.
5. Rental Income Tax
If you are in the real estate business you will have to pay this tax on rental income received from renting out property. The specific amount depends on whether the rented property was used for residential or commercial purposes.
6. Excise Duty – if your business involves importing goods for resale then you are obligated to pay excise duty.
7. Pay As You Earn – If you have employees you are obligated to deduct pay as you earn salary from their income and remit it to KRA.
8. Value Added Tax (VAT) – You will need to pay Value Added Tax on any money you earn from providing a service or goods in Kenya. VAT is charged on the supply of taxable goods or services made or provided in Kenya and on importation of taxable goods or services into Kenya.