Know Your Tax Terms: A List of Tax Terms Kenya You Should Know
INCOME TAX: tax imposed on income earned by individuals, companies, businesses, organisations, etc. Types of income tax include PAYE, individual income tax, corporation tax, withholding tax, rental income tax, etc.
VALUE ADDED TAX (VAT): a consumer tax charged on taxable goods and taxable services supplied in Kenya and/or imported into Kenya.
WITHHOLDING TAX: tax deductible from certain classes of income at the point of payment. eg, interest, dividends, royalties, commissions, rental income paid through agents, professional fees, pensions
EXCISE DUTY: tax imposed on goods and services manufactured in or imported into Kenya.
CUSTOMS DUTY: tax paid on the importation or exportation of goods.
RENTAL INCOME TAX: tax paid on monthly gross rental income earned where the monthly rent income is between Kshs. 24,000 per month and Kshs 15 million per annum.
DIGITAL SERVICE TAX: It is payable on income derived or accrued in Kenya from services offered through a digital marketplace.
CAPITAL GAINS TAX: income tax payable on the profit made on the transfer of property in Kenya acquired on or before January 2015. The current CTG is 15%
PAY AS YOU EARN (PAYE): a form of income tax imposed on income made from gainful employment.
TURNOVER TAX: tax imposed on the gross sales of a business. Currently turnover tax is payable by businesses with a turnover of between Kes 1m to 5M at the rate of 1%
CORPORATION TAX: tax imposed on profits made by resident companies or on foreign companies with a permanent establishment (PE) in Kenya for profits attributable to the PE. The current rate is 30% for resident companies and 37.5% for foreign companies.