Taxation for Not-For-Profit Organisations

How do I File and Pay my Taxes?

 

1. Pay As You Earn (PAYE)

Kenyans working for NPOs are not exempt from PAYE. 

 

Foreigners working for NPOs get exemptions on their PAYE but this applies on a case-by-case basis.

 

PAYE is deducted monthly at the prevailing individual income tax rates, on or before 9th of the following month. 

 

How do I file for PAYE?

PAYE returns are filed online via itax
NPOs without PAYE to remit should file a NIL return via iTax.


How do I pay for PAYE?

After filing the PAYE return, generate a payment slip online via iTax and make payment at any of the KRA appointed banks. 

 

Does PAYE include earnings from casual employment?

Are employee benefits taxable? 

How are loans to employees taxed?

Use our calculator to work out PAYE. 

 

2. Withholding Tax 

There no exemptions associated with Withholding Tax.

 

What is the rate of taxation for Withholding Tax? 

 

Withholding Tax rates vary depending on the income, and whether the recipient of the income is resident or non–resident. 

What are the prevailing Withholding Tax rates? 

 

How do I pay withholding Tax?

Payment is done via iTax. 

Generate a payment slip and present it, with the tax due, at any of the KRA appointed banks.


After successful payment of Withholding Tax, both the Withholder and Withholdee will receive a withholding certificate via email. 

 

What is the penalty for late payment?

What is exempt from Withholding Tax? 

 

3. Value Added Tax (VAT) 

What is the rate of taxation for VAT?

The two tax rates for VAT are:

  • 16% - general rate of tax and is applicable to most of taxable goods and taxable services.
  • 0% - applies to certain categories of goods and services (excluding exports). These are; agricultural inputs, pharmaceutical products, educational materials and supplies to privileged persons.

 

VAT exemptions for NPOs. 

Use our calculator to work out VAT.

 

How do I file for VAT?

VAT returns are filed online via iTax, on or before the 20th of the following month, by filling a VAT3 Return form.

How do I account for VAT on imported services? 

When is VAT on Imported Services due? 

 

How do I pay for VAT?

After filing your VAT returns online, generate a payment slip for any tax due and make payment to any of the KRA appointed banks. 

Payment can be made in Cash, Cheque or RTGS. 

 

4. Excise Duty

What is the rate of taxation for Excise Duty? 

The rate varies depending on the goods and services.


Types of Excise Duty

  • Specific Duty Rate: This is where a specific amount of tax is charged per unit of measure on an excisable product e.g. Kshs. 120 per litre of spirit.
  • Advalorem Duty Rate: This is where a percentage rate of duty charged on the value of an excisable product.
  1. Imports tax is charged on the total Cost, Insurance and Freight (CIF) and;
  2. Locally manufactured goods advalorem rate is charged on the Ex-factory selling price.

 

How do I pay for Excise duty? 

Excise Duty on import is paid at the port of entry. 

Domestic Excise Duty should be paid by 20th day of the following month.

 

Generate a payment slip via iTax and present to any of the KRA appointed banks to make the payment. 

 

5. Customs Duty

To get an exemption on Customs Duty, NPOs must apply to the Cabinet Secretary for National Treasury through the NGO Board.