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1. Residents

• National ID/Alien ID Card details
• Employers' PIN details for those who are employed.
• Business registration certificate details for those in business.

2.Non-Kenyan employee (Residing in Kenya)

• Letter of introduction by employer
• PIN of employer
• Original Valid Passport of the applicant
• Valid work permit or special pass of applicant with the name of employer on the permit.
• Confirm endorsement of work permit in the passport
• KRA PIN application acknowledgement receipt.

3.    Non-Kenyan Investor

• Letter of introduction by a tax agent
• PIN of tax agent and Valid Tax Compliance Certificate of the tax agent
• Letter of appointment of tax Agent by applicant
• Documentary proof of investment (Certificate of incorporation/Compliance, CR12, CR8, CR 2, project proposal, Ken Invest application)
• Endorsement by Kenya Investment Authority (Ken Invest Endorsement letter is given to registered companies with an investment exceeding USD 100,000)
• Class G - Investors permit for investments less than USD 10,000.
• Original valid Passport of applicant or a certified copy of the passport for investors residing outside Kenya.
• KRA PIN application acknowledgement receipt

4.   Diplomats and Employees of Organization covered under the Privileged and Immunities Act Cap179 e.g. United Nations , UNICEF etc.

• Note verbale from the Embassy or the privileged body.
• Original valid Passport
• Diplomatic Card.
• Copy of Exemption stamp on the passport
• Notification of arrival
• PIN request form from IPMS-Ministry of Foreign Affairs.
• KRA PIN application acknowledgement receipt.

5.    Employees of Institutions related to Organizations or bodies covered under the Immunities and privileges Act Cap 179 e.g. J.I.C.A IFC, International School of Kenya, German School etc.

• Letter of introduction by the employer
• Copy of PIN of the employer
• Original Passport
• Endorsement of immigration exemption status in the passport or work permit issued on gratis
• An introduction letter by the Ministry of Finance and a copy of the gazette notice
• Original Valid Passport of applicant
• KRA PIN application acknowledgement receipt

6.   British Army Personnel

• Original passport of applicant
• Letter of introduction by the British Peace Support team in Kenya
• Copy of the Memorandum of understanding between Kenyan and British Government
• KRA PIN application acknowledgement receipt

7.    Refugee Residing in Kenya

- Employed

• Original and Copy of a valid Refugee ID (Validity is now 5 Years)
• Introduction letter from Department of Refugees Affairs Secretariat
• Introduction letter from Employer
• Work permit from Immigration (class M permit)
• KRA PIN application acknowledgment receipt.
• Original and Copy of a valid Refugee ID (Validity is now 5 Years)
• Introduction letter from Department of Refugees Affairs Secretariat

- In business/Driving License

• Business Registration Certificate – If in business
• Letter of introduction by a tax agent.
• Pin and a valid Tax compliance certificate of the tax agent.
• KRA PIN application acknowledgment receipt.

8. Dependants

-Non-Resident Married to a Kenya Citizen

• Original and copy of Marriage certificate. Certified copy of Marriage certificate if from another county.
• Original and a copy of Identity card and PIN of Kenyan spouse
• Dependents Pass from Immigration
• Original Valid Passport
• Endorsement of dependent pass in the passport
• KRA PIN application acknowledgement receipt

- Spouse of Non –Kenyan non-resident employee

• Dependant’s Pass from Immigration
• Original Valid Passport
• Endorsement of dependent pass in the passport
• Original valid passport and PIN of the spouse
• Work permit of the spouse
• KRA PIN application acknowledgement receipt

- Other dependants e. g Children and parents

• Dependants Pass from Immigration
• Original Valid Passport
• Endorsement of dependent pass in the passport
• Original valid passport and PIN of the principal
• Work permit of the principal if employed.
• KRA PIN application acknowledgement receipt

9.   Students

• Original and copy of Valid Passport
• Endorsement of student pass in the passport
• Original and copy of valid student pass
• Original and copy of Letter of introduction/Admission from institution as per the student pass
• KRA PIN application acknowledgement receipt.

10.         Non-Kenyan Non-Resident Account Reactivation

• Letter of introduction from a KRA registered tax agent.
• Copy of PIN of the registered tax agent
• Valid Tax Compliance Certificate of the tax agent
• Original and copy of valid passport
• Letter of introduction from the bank addressed to the commissioner domestic taxes as proof of account holding.
• Certified Bank statement.
• Copy of the bank statement.
• KRA PIN application acknowledgement receipt

11.  Non-Kenyan Non - Resident consulting with state agencies

• An introduction letter by the Ministry of Finance addressed to the commissioner of domestic taxes
• Work permit issued on gratis
• Original valid job card from the ministry of finance
• Introduction letter from the project body
• Original valid passport
• KRA PIN application acknowledgement receipt

12. Buying a stand-alone property/piece of land

• Copy of the sale agreement signed by all parties.
• Copy of the title deed.
• Copy of the deed plan
• Introduction letter from a KRA registered tax agent.
• Copy of pin and tax compliance certificate of the tax agent.
• Letter of appointment of the tax agent by the applicant
• Clear copy of the passport.
• Acknowledgement receipt from the iTax portal.

13. Buying an apartment

• Copy of the sale agreement signed by all parties.
• Copy of the mother title deed.
• Copy of the deed plan.
• Introduction letter from a KRA registered tax agent.
• Letter of appointment of the tax agent by the applicant
• Copy of pin and tax compliance certificate of the tax agent.
• Clear copy of the passport.
• Acknowledgement receipt from the iTax portal

14. Acquisition of property through inheritance

• Confirmation of grant.
• Grant of probate from the high court.
• Gazette notice listing the applicant as one of the beneficiary.
• Copy of the title deed.
• Clear colored copy of the passport
• Letter of introduction from KRA registered tax agent.
• PIN number of a registered tax agent.
• Valid Tax Compliance Certificate of the tax agent.
• Acknowledgement receipt from the iTax portal.

15.  Military personnel excluding Batuk (British Army Personnel)

- East Africans

• Original and Copy passport of passport.
• Military Personnel ID.
• Memorandum of Understanding between Kenya and the country of Origin.
• Introduction letter from the college stamped by DOD HQ Kenya.
• Acknowledgement receipt the iTax portal.

16. Military personnel excluding Batuk (British Army Personnel)

Non East Africans

• Original and Copy of passport.
• Military Personnel ID.
• Introduction letter from DOD HQ Kenya.
• Note Verbale from the diplomatic mission (Stamped and Signed).
• Acknowledgement receipt the iTax portal

17. Medical/Treatment purpose

• Original and Copy passport of passport
• Introduction letter from the attending Hospital (signed and stamped).
• Hospital Referral letter from the Country of Origin.
• Acknowledgement receipt the iTax portal

18. Kenyans with no IDs who exited the country (Kenya) and have acquired a passport of the residence country.

• Copy of Kenyan birth certificate.
• Copy of Kenyan IDs of the parents.
• Police clearance certificate from the country of domicile
• Clear colored copy of the passport.
• Acknowledgement receipt from the iTax portal.

19. Retirees

• Resident permit – Class K
• Insurance security bond
• Original valid passport.
• Letter of introduction from KRA registered tax agent.
• PIN number of a registered tax agent.
• Valid Tax Compliance Certificate of the tax agent.

20. Missionaries

• Introduction Letter from the Religious body.
• PIN certificate of the religious body
• Original Passport and copy of passport.
• Original and copy of class I missionary permit from Kenya immigration.
• Copy of the endorsed page of class I missionary permit in the passport.
• KRA PIN application acknowledgement receipt

You can request to be relieved of your tax obligation for a specified period of time due to various reasons.

You can request for cancellation of your PIN or Tax Obligations.

A PIN is a Personal Identification Number used while doing business with Kenya Revenue Authority, other Government agencies and service providers.

Personal includes both individuals and artificial persons (i.e. company, club, Trust, etc.)

A sole proprietorship will use the proprietor?s individual PIN for all transactions.

Who should have a PIN?

You are required to have a PIN if you;

• Are employed
• Are in business
• Have rental income
• Wish to apply for a HELB Loan
• Want to perform any of the transactions listed below

When can I use the KRA PIN?

The most popular transactions that require PIN include:

• Registration of title, stamping of instruments by the Commissioner of Lands, and payment of Land Rent.
• Approval of plans, payment of water deposits, application for a business permit, payment of Land Rent by Local Authorities.
• Registration of Motor Vehicles, and licensing under the Traffic Act (Cap 403) by the Registrar of motor Vehicles.
• Registration of Business Names and Companies by the Registrars of Business names and companies.
• Trade licensing by the Ministry of Commerce.
• Application for Value Added Tax registration.
• Underwriting policies by Insurance Companies.
• To facilitate importation of goods, Customs clearing and forwarding at the offices of Commissioner of Customs and Excise.
• Payment of Deposits for power connections at Kenya Power and Lightning Co. Ltd.
• To facilitate all contracts for supply of goods and services to all Government Ministries and Public bodies.

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PAYE AS YOU EARN (PAYE)

PAYE is a system of tax collection whereby employers are required to deduct tax from the employment income of their employees and remit the tax to the Kenya Revenue Authority.

Taxable Employment Income

•    Taxable employment income includes, all cash payments however described and the value of non-cash benefits (exceeding Ksh 5,000 per month).

•    Cash pay includes; wages, salary, sick pay, leave pay, fees, commissions, bonuses, service gratuity allowances, director’s fees, overtime, pension, entertainment and any other payments received in respect of employment

•    Any excess mileage reimbursement to employee based on the rates that are higher than AA Kenya rates will be taxable on the employee. Effective 1^st July, 2023.

•    Club entrance and subscription fees shall be treated as taxable income to the extent that the expense has been allowed against the employer’s income.

•    Charged on both Residents and Non-Residents.

•    Tax accounted for by Employers only.

Who is eligible for PAYE registration?

Any person who pays emoluments to an employee(s) is required to register for the PAYE obligation, upon which the person is required to:

•        Deduct tax from the employee(s) emoluments

•        Remit and account the tax deducted to the Kenya Revenue Authority

Income Tax Individual Tax Rates

For purposes of computing PAYE, an employer is required to apply the Individual Income Tax Rates (Bands) that range from 10% to 35% as per Finance Act 2023 as tabulated (effective 1^st July 2023);

PAYE Due Date

Employers are required to deduct tax (PAYE) from their employees’ emoluments at the prevailing Individual Income Tax Rates and remit the amounts deducted to KRA on or before the 9th day of the following month. A PAYE return should also be filed through iTax on or before the 9th day of the following month.

Non Cash Benefits Chargeable to Tax

Gains or profits from employment that are not paid in cash are chargeable to tax. Such gains or benefits include:

•    Value of car benefit- where an employee is provided with a motor vehicle by his employer

•    Value of housing- where an employee is provided residential housing by the employer

•    Loans at interest rates that are lower than the prevailing market rate

•    Value of benefit, advantage or facility in excess of the allowable limit of KShs 5,000 per month or KShs. 60,000 per year.

•    Meal benefit in excess of Kshs. 5,000 per month or KShs. 60,000 per year.

•    Pension contribution paid by a tax exempt employer to an unregistered scheme.

•    Pension contribution paid by an employer to a registered or unregistered scheme in excess of the allowable amount of KShs 30,000 or KShs 360,000 per year.

Employment Income not Chargeable to PAYE

·       Meals provided by the employer up to a maximum of KShs 5000 per month or KShs. 60,000 per year.

·       Night-out of KShs. 2,000 per day

·       Medical Cover by employer

·       In the case of non-Kenyan citizens who are in Kenya solely to serve the employer, expenditure on passages between Kenya and any place outside Kenya borne by the employer.

·       Pension contribution made by an employer, who is a person chargeable to tax, to a registered or unregistered scheme that is within the allowable limit of KShs. 30,000 per month or KShs,m. 360,000 per year.

·       Gratuity or similar payment paid by an employer in respect of employment or services rendered which is paid under a public pension scheme  not exceeding Ksks. 360,000 for each year of service.

Allowable deductions

These are the amounts deducted from an employee’s emoluments in order to arrive at the amount which will be subjected to tax

Amounts deductible in determining the taxable employment income shall include:

1.Amount deducted as Affordable Housing Levy pursuant to the Affordable Housing Act, 2024.

2.Contribution to a post-retirement medical fund subject to a limit of Kshs. 15,000 per month.

3.Contributions made to the Social Health Insurance Fund (SHIF).

4.Mortgage interest, not exceeding Kshs. 360,000 per year (Kshs. 30,000 per month), upon money borrowed by a person from one of the first six financial institutions specified in the Fourth Schedule to the Income Tax Act, to purchase or improve premises occupied by the person for residential purposes.

5.Contribution made to a registered pension or provident fund or a registered individual retirement fund up to a limit of Kshs. 360,000 per year (Kshs. 30,000 per month).

Tax Reliefs

1.  Personal Relief

•     Personal Relief is granted to resident individuals.

•     It is meant to lighten the tax burden on the taxpayer.

•     It is currently set at KShs 2,400 or KShs 28,800 per year.

2.  Insurance Relief

•     Insurance relief is granted to an employee who has paid insurance premiums for life or health or education policies for himself, his wife or child.

•     Relief is given at 15% of premiums paid up to a maximum of KShs 60,000 per annum.

•     For education the policy has a maturity period of at least 10 years.

3.  Employment Act, 2007 (Affordable Housing Levy)

1.   Each employee and employer shall pay the Affordable Housing Levy at a rate of 1.5% of the employee’s gross monthly salary;

2.     Remit the amount comprising the employee’s and the employer’s payment within 9 working days after the end of the month in which the payment is due.

PAYE Return Filing

•    At the end of the month an employer is required to compile a list of all the employees from whom he has deducted tax and submit the information to the Commissioner via a PAYE Return.

•    PAYE returns are submitted online via iTax https://itax.kra.go.ke.

•    If you have no PAYE to declare, you are required to submit a nil return.

•    Log in to iTax itax.kra.go.ke using your KRA PIN and password, click on Returns tab and select File Return option.

•    Select the tax obligation as Income Tax - PAYE then click on next.

•    Download the Excel return form, fill appropriately and click on ‘VALIDATE’ at the end of the Sheet N_ Tax Due.

PAYE Return Filing

•    The system will create a zipped file, which is found in the Documents folder.

•    Log back to your iTax profile. Under “Returns” tab, select “File Return”, Upload the zipped return in the “Upload Form” section, Agree to the Terms and Conditions by marking the check box then click on submit..

•    You will receive an acknowledgement receipt to confirm successful filing of your PAYE return.

Step by step procedure for PAYE Payment

•    Login to iTax using your PIN and password via https://itax.kra.go.ke.

•    Click on Payments tab, select Payment Registration.

•    Select Tax head as Income Tax.

•    Select Tax Subhead as Income Tax- PAYE.

•    Select Payment Type as Self-Assessment.

•    Select Tax Period.

•    Select the liability and click on add.

•    Select Mode of Payment as Other Payment Mode or RTGS.

•    Click on the submit button.

The system will generate a Payment slip, which you will download and use to make the payment. A copy of the payment slip is sent to the taxpayer’s registered email address.

Make Payment through any of the following methods

1.  The bank using the Payment slip generated by the system.

2.  M-PESA by using the Paybill number 222222, Account number is the Payment Registration Number, enter amount, MPESA PIN, and press OK to complete the payment.

3.  Debit/Credit Card: Fill in the details in the fields marked with an asterisk

Penalties

The due date for filing a PAYE return and payment of the taxes deducted from employees is 9th of the following month. Where an employer does not observe the due dates, the penalties below shall apply:

1.  Late filing

    •     The higher of 25% of the tax due or KShs. 10,000.

2.  Late Payment

    •     Penalty of 5% of the tax due; and

    •     Late payment interest at 1% interest per month or part of a month on the unpaid tax until the tax it is paid in full.

3.  Penalty for failure to deduct and account for tax 25% of Tax Involved or KShs. 10,000.00 whichever is higher.

Importing and Exporting, at a glance

What is Exportation?

To Export means to take or cause to be taken out of the Partner State.

In accordance with the provisions of Sec.73 of the EACCMA 2004, goods for Exportation shall be entered (declared) in the prescribed manner and the owner furnish customs with the full particulars, supported by documentary evidence, of the goods referred to in the entry. The goods declared shall be exported within thirty days from the date of entry.

What is required when Exporting?

Clearing Agent

The Exporter will need to acquire the services of a licensed customs clearing agent. A clearing agent is mandated to process the Exportation documents in the customs system and assist in clearing goods on your behalf.

Export Levy:

Some select items attract an export Levy as outlined the First Schedule of the miscellaneous Fees and Levies Act of 2016.

What are the documents required in clearance of Exported goods?

To clear any Exported goods requires the engagement of a licensed customs clearing agent. When engaging with your preferred clearing agent ensure you always provide Exportation documents including but not limited to:

• A valid Commercial Invoice;
• Certificate of origin
• Permit/License for restricted goods
• Personal or Taxpayer Identification Number (PIN certificate)
• Purchase Orders/Contracts
• Packing List

The customs clearing agent is then allowed to declare the goods you are Exporting in the customs system (Create an entry).

Goods Clearance Process

1. Entry Declaration and Processing

   The appointed clearing agent should make a customs declaration (entry), in accordance to the provisions of Section 73 of the East Africa Community Customs Management Act 2004. Customs Shall Process all compliant declaration.

2. Stuffing, Verification and Release

   The agent should present the original entry and supporting documents to the customs discharge/loading station for processing (witness of Stuffing/verification may be done at the station or any other approved stuffing area).

3. Exit

   Upon stuffing/Verification, all compliant declarations are cleared and released. Upon exit through the border, or port, a certificate of export is issued.

What is importation?

To Import means to bring or cause to be brought into the Partner States from a foreign country;

What to know when importing

In accordance with the provisions of Sec.34 of the EACCMA 2004, goods for importation shall be entered (declared) within twenty-one days after the commencement of discharge or in the case of vehicles, on arrival.

The importer or Clearing agent shall capture all the mandatory details required when declaring an import in the customs System.

What is required when importing?

Clearing Agent

The Importer will need to acquire the services of a licensed customs clearing agent. A clearing agent is mandated to process the importation documents in the customs system and assist in clearing goods on your behalf.

Duties and Taxes Payable:

Taxes are payable depending on the value of the imported item(s) and the duty rate applicable outlined under different legal documents as given below.

1. Import Duties

   Depending with the item to be imported, the Import tax rates vary between 0%, 10% and 25% as provided by the East Africa Community Common External Tariff (CET). However, Sensitive items Attract duty higher than 25%. The sensitive items are listed in the schedule 2 of the EAC Common External tariff.

2. Excise Duties

   Excise Duty depends on whether the imported item is excisable or not. The Excise duty rates are prescribed under the Excise Duty Act 2015.

3. Value Added Tax (VAT)

   The normal rate of VAT is 16%. However, the Items exempted from VAT as provided by the VAT Act of 2013 attract a rate of 0%.

4. Import Declaration Fees (IDF) & Railway Development Levy (RDL)

   An import declaration fees of 3.5% and Railway development Levy of 2% are levied on value of imports as provided by the miscellaneous Fees and Levies Act of 2016.

What are the documents required in clearance of imported goods?

To clear any imported goods such as a car, machinery or general merchandise requires the engagement of a licensed customs clearing agent. When engaging with your preferred clearing agent ensure you always provide importation documents including but not limited to:

• A Certificate of Conformity (CoC) from the PVoC agent for regulated products;
• an import standards mark (ISM) when applicable;
• Valid Commercial Invoice from the exporting firm
• valid pro forma invoices from the exporting firm.
• Bill of Lading (sea cargo)/Airway Bill (air cargo)
• Certificate of origin
• Freight invoice for sea cargo
• Logbook and its translation if it is not in English (motor vehicle)
• Permit/License for restricted goods
• Personal or Taxpayer Identification Number (PIN certificate)
• Exemption letter (in case goods are exempted)
• Purchase Orders/Contracts
• Certificate of Roadworthiness for Motor Vehicles
• Packing List
• Letter of Credit (if available)

The customs clearing agent is then allowed to declare the goods you are importing inn the customs system (Create an entry).

Goods Clearance Process

1. IDF Lodgement & Processing

   The importer on obtaining the pro-forma invoice shall engage a licensed clearing agent to lodge an import declaration form. The importer should then send the IDF to the Supplier for Pre-shipment inspection.

2. Entry Declaration, Payment of Taxes and Processing

   The appointed clearing agent should make a customs declaration and provide the importer with a payment slip. The importer makes the payment to the bank and issues the agent with the official bank slips. Customs Shall Process all compliant declarations.

3. Verification and Other Enforcement Measures

   The agent should present the physical file at the customs station where the goods are domiciled where physical verification is conducted.

4. Clearance and Release

   Upon verification, all compliant declarations are cleared and released.

Customs Bonds

Definition of Bonds terminologies

Bond

According to the World Customs Organisation (WCO) Glossary of International customs terms 2018, a bond is “an undertaking in due legal form, by which a person binds himself to the Customs to do or not to do some specified act”.

It is a legal contract executed under a seal whereby the person or persons entering into it bind themselves to pay a specified amount of money if any of conditions of the contract are not satisfied.

The bond simply guarantees that Customs will collect all import duties, taxes, fines or penalties from the surety company, if they cannot collect them from the importer.

• Bank guarantee

This is a requirement for payment under dispute where the principal decides to execute a bond (of the amount in dispute) instead of paying in cash. Its validity depends on the use.

• Bond Reinstatement

A bond may be reinstated due to various reasons for example, due to successful accounting of transactions covered by the bond. In iCMS (Integrated Customs Management System), a bond reinstatement notice is send to the bond applicant.

• Bond Suspension

A bond may be suspended due to various reasons for example, due to failure to account for the transactions covered by the bond. In iCMS, a bond suspension notice is send to the bond applicant.

• Surety/guarantor

The person who undertakes to pay the bond if the principal fails not only to fulfill the conditions but also to pay the penalty to bond. These are normally the insurance companies or banking institutions.

• Custom Security Bond

Contract executed under seal whereby the party or parties entering into it bind themselves to pay to The Commissioner of Customs a specified sum of money, referred to as the penalty to the bond, if any of the conditions of the bond are not satisfied. The obligation in all security bonds is joint and several.

• Principal

The person who undertakes to fulfill the conditions of the bond and pay the penalty of the bond if any of the conditions of the bond are not satisfied. They are normally the importers or their agents.