Kevinmutua99
New Lister
Uhuru signed into law the Tax Laws (Amendment) Bill, 2020 as part of measures to cushion the public against effects of Covid-19 pandemic.
The bill published on March 30 amends tax-related laws including Income Tax Act (CAP 470), Value Added Tax Act of 2013, Excise Duty Act (2015), Tax Procedures Act (2015), Miscellaneous Levies and Fees Act (2016) and Retirement Benefits Act, 1997.
In a notice on Tuesday, Kenya Revenue Authority reduced the rates of tax applicable on personal emoluments and pension receipts with effect from April 25th.
Those earning above Sh24, 000 the rate of PAYE will be 10 per cent, the first Sh16,667 will attract a deduction of 15%, the next Sh16,667 will be deducted 20 per cent.
On all income amounts in excess of Sh57,334, they will pay a 25 per cent Pay As You Earn.
This means that there will be a monthly personal relief of Sh2,400
On Pensions, the new tax rates are as follows;
Any amount in excess of tax-free amounts on first Sh400,000 will be deducted a 10%, on next Sh400,000 a deduction of 15% will be done, the next Sh400,000 there will be a deduction of 20%.
On any amount in excess of Sh1.2m, there will be a deduction of 25%.
"Please note that due date for remittance of PAYE taxes and taxes on pension remains on or before 9th of the following month," KRA added.
KRA said all employers paying employees for the month of April shall apply the new individual monthly and annual tax rates in deducting and remitting pay.
President Kenyatta said the amended law, which mainly targets low-income earners, includes a 100 per cent Pay As You Earn (PAYE) tax relief for employees earning less than Sh24,000 per month.
Those earning above the new threshold will benefit from a PAYE tax reduction of 25 to 30 per cent.
The Bill was passed by Parliament on Wednesday
The bill published on March 30 amends tax-related laws including Income Tax Act (CAP 470), Value Added Tax Act of 2013, Excise Duty Act (2015), Tax Procedures Act (2015), Miscellaneous Levies and Fees Act (2016) and Retirement Benefits Act, 1997.
In a notice on Tuesday, Kenya Revenue Authority reduced the rates of tax applicable on personal emoluments and pension receipts with effect from April 25th.
Those earning above Sh24, 000 the rate of PAYE will be 10 per cent, the first Sh16,667 will attract a deduction of 15%, the next Sh16,667 will be deducted 20 per cent.
On all income amounts in excess of Sh57,334, they will pay a 25 per cent Pay As You Earn.
This means that there will be a monthly personal relief of Sh2,400
On Pensions, the new tax rates are as follows;
Any amount in excess of tax-free amounts on first Sh400,000 will be deducted a 10%, on next Sh400,000 a deduction of 15% will be done, the next Sh400,000 there will be a deduction of 20%.
On any amount in excess of Sh1.2m, there will be a deduction of 25%.
"Please note that due date for remittance of PAYE taxes and taxes on pension remains on or before 9th of the following month," KRA added.
KRA said all employers paying employees for the month of April shall apply the new individual monthly and annual tax rates in deducting and remitting pay.
President Kenyatta said the amended law, which mainly targets low-income earners, includes a 100 per cent Pay As You Earn (PAYE) tax relief for employees earning less than Sh24,000 per month.
Those earning above the new threshold will benefit from a PAYE tax reduction of 25 to 30 per cent.
The Bill was passed by Parliament on Wednesday
