Connect with us

Business News

Small Businesses to start Paying Presumptive Tax from January 2019

Published

on

Small enterprises in all counties will start paying 15 per cent of the business permit fee or license from 1 January 2019, the tax Czar has proclaimed.

In a notice to the public, Kenya Revenue Authority says it is targeting businesses with turnover less that Ksh5 million per year with the presumptive tax.

The business owners will pay for the tax at the time of payment for business permit fee or trade license.

“Eligible taxpayers will have to log into iTax to make payment for presumptive tax. The taxpayers shall be required to generate a Payment Generation Number (PRN) on iTax under Presumptive Tax Payment, after which they can pay through MPesa paybill number 572572 or any other partner bank,” said kRA’s commissioner for strategy, innovation and risk management.

The tax does not apply to persons engaged in management or professional services, rental businesses and incorporated companies.

According to EY Kenya Tax Guide 2019:

Presumptive tax applies to:

  • Any person whose turnover from business exceeds does not exceed KES 5m in a year of income.
  • All persons who are issued or liable to be issued with a business permit or trade license by a county government in a year of income.
  • The rate of presumptive tax is 15% of the amount payable for a business permit or trade licence issued by a County Government. The tax charged shall be final. A person liable to pay presumptive tax notice may by notice in writing, addressed to the Commissioner, elect not to be subject to presumptive tax in which case the other provisions of the ITA shall apply.
  • Presumptive tax does not apply to management, professional or training fees, rental income and income of an incorporated company.
  • The lower corporation tax rate is applicable whether Special Economic Zone enterprise sells its products within or outside Kenya.
  • The 15% corporate rate of tax shall be extended for a further period of five years if the company achieves a local content equivalent to 50% of the ex-factory value of the motor vehicles.

Source link

Comments

comments

Facebook

Trending